Gold And Silver Dropped Sharply

Gold and Silver dropped sharply this morning and stopped precisely at their 4-Hour trendlines. Each formed daily swing highs but they failed to close below their 10-day EMA’s.

Follow-through is crucial. A top is likely if gold and silver make fresh lows tomorrow. Gold needs to sink below $1,273.50 and Silver beneath $17.28. That should be enough to revoke the support at the 4-Hour trendline.

-US DOLLAR- Prices closed just beneath the level required to produce a swing low. A daily close above 97.28 would be the first step in establishing a bottom.

-GOLD- Prices made a swing high but failed to close below the 10-day EMA. A top is likely if prices take out today’s low ($1,273.50) and settle beneath the 10-day.

-SILVER- Silver also produced a swing high and prices ended directly at the 10-day EMA. Taking out today’s low of $17.28 would propose a top.

-GDX- Prices attempted to fill Tuesday’s gap. A daily close below $23.08 will signify a top.

-GDXJ- Juniors closed beneath yesterday’s low, creating a swing high. Closing below the 10-day EMA is the next step in confirming a top.

-SPY- Prices have consolidated since Monday. They are gathering energy for the next move. Support is at 241. We should see 246+ before starting a deeper correction.

-WTIC- Prices broke sharply from the brief consolidation and tested the May closing low. The next swing low should signal an intervening rebound to ease the short-term oversold condition.

Tomorrow’s close is important. I’ll update in the morning and again in the afternoon. If gold and silver break key levels, I may consider reapplying shorts.