Hit Where It Hurts

Silver and Gold.

I must say that I am quite pleased with the resilience and strength of the PMs this morning. Both are receiving a boost from an ass-kicking copper market, which is testing the highs of last Monday and is back above 460.

I think we've reached a point where the PMs are about to make their short-term intentions known. They have similar chart patterns and both appear poised to break higher. However, they have also both given us a nearby guidepost that will help us discern direction and trade with confidence.
Here are your two charts with comments below:

Rarely do these markets look so positive yet also give us a clear signal of where we should be cautious.
In gold, we've had 7 trading days to consolidate around that center line, which I've drawn near 1355. It looks to me like we are ready to start another leg higher, as soon as today. I can invest/trade with confidence that we are headed to the 1390 area very soon. However, I can utilize a pretty tight stop because its so clear that a move down trough the lows of last week, near 1345, would instead signal that the break to 1390 is still some time away. From $1360, that's a ratio of 2:1, upside to downside which isn't too bad.

In silver, you see an almost identical pattern. There's a very clear centering line around the $29.80 area. The longer we stay above there,  the more likely a test of the old highs becomes. Like gold, a decisive move down through the lows of last week would postpone that test indefinitely.

In the end, I think both charts look great and so I'm willing to stick my neck out once again. While admitting to the foolishness of predicting short-term moves, I'm going to do it again anyway. We've got $7B in POMO today and tomorrow is Happy Tuesday (we know from experience that the highest percentage of UP days fall on Tuesdays), so I think the breakout happens now.
A run in silver, through 30.50, will set off some buy stops and instill confidence in longs. That will kick us up to $31. I expect this later today or tomorrow.
Gold looks to be headed to 1370 today and, trading through there, should jump pretty quickly toward 1380.

So, let's kick back and watch this play out. It should be a fun day. TF


1:45 EST UPDATE
A very nice start to the week. Silver closing above $30.50 is significant.
I'll have some updated charts within the hour. Keep checking back.