Patterns of the day – Gold and Silver

Gold found support at the backside of the “Major” descending trendline, (see right hand side below), and it coincided at the same time with support of a perfect parallel channel that formed over the past week on the 30 minute chart, (see left hand side below).  I strongly believe that identifying these types of chart developments increases the probabilities for trading success.

The way things stand now, the odds of triumphantly trading on the long side of the gold contract are increasing.

In my last post on gold I felt that piling in on the long side with the break of the major trendline was “rolling the dice”.  There is always a potential payoff in any situation.  Likewise there is always potential for loss when presented with the greatest probabilities.

In silver there was a “Coiled Spring” on the 5 min chart and an explosive move off of it afterward, see left hand side below.  Right hand side daily chart show silver breaking through its major trendline.

The way things stand right now, and the charts are always subject to change, there is zero chance I would trade on the short side of the precious metals.

Very interesting COT reports and changes to open interest in the metals recently.

The link to the last post on the metals is here.



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