SLV and GLD

Not much has changed on the 3C chart in either, but as many of you know I've had my suspicion about both metals.

 First the daily of Gold, you may recall that I looked at this pattern in GLD and it looks very much like a top. I even thought we'd see a breakout of the wedge which we did as these tops tend to be symmetrical.

 This would be considered a complex H& top if we see prices confirm and break below the red trendline (neckline). The fall in both metals is being attributed to margin hike fears such as we saw today in Brent and WTI crude oil, no such hikes appeared, but they may. Since 3C is still on track since the last update, I'll just be watching for accumulation which may suggest this is other then a top. However when a trade gets a crowded as gold has, institutional money often takes the other side, even if they believe the asset is going higher in the end. Everyone on the same side of the boat makes for no profits.

Silver as you know is a different story, it's been held down in price by a short JPM has had on the silver market for some time. There's been a viral campaign to try to break up this position, but it failed 3x in the past. I've been suspicious of this latest attempt as margin squeezes caused by short covering in my opinion would have caused the metal to nearly double. Should silver fall below the trendline breakout, just from a brainwashed trader's mentality (which most are unfortunately), there will be an effective bulltrap set and all the longs who purchased on margin will be getting margin calls and forced covered positions from their brokers which will send silver plummeting much like we saw in December of 2010, except this time worse as the market liquidity structure isn't there and the main short is not going to cover to provide a bid in a falling market. This may be a trade we might want to take, but first I want confirmation. there's too much external market risk, I'll give up a few percent to know that my trade has a much greater probability.

I mentioned earlier JPM may still come in with a bear raid, today was not it (as evidenced by gold's drop and no 3C leading negative divergence) and if they do so now, they could likely pull off a victory.

So we'll keep an eye on both trades, it's a fine line to know when to trade with the trend and to know when you are being herded like sheep. I recommend some patience as the silver trade will probably be settled first and shortly.

Be sure to watch the video at Trade guild tonight. Hedge funds have done it again-last month too and leveraged up on margin. There are few shorts in the market and liquidity providers have been wiped out by HFT firms. This is a dangerous market, but in that there's great opportunity. If you have time, it's a short video.