Silver and especially gold had nice rallies today as it was 'risk on' with Sarkozy and Merkel crooning a lullaby to the equity markets. The dollar retreated sharply from its zenith. It has not yet broken uptrend.
I wonder if the metals liquidation is over, and if the hands that remain are strong and relatively unleveraged. We will not know until the stock market corrects again and we see if the metals follow.
Earnings season is coming up for stocks. I am not impressed with the stock rally today and put a small short position back on since we have reached my 'bounce' targets. Now we see if we rally on or not.
I am long gold bullion. We have not yet broken out and may be coming to a similar situation that we have had a bounce, but it must move higher than 1680 and 1700 and stick a couple days close to say the trend is higher again in the short term.
So I have a little hedge back on. If the metals break out and stocks keep rallying then the miners look a little more interesting.
I have included the December Gold futures chart to make some of the levels of resistance and their meaning easier to see.
