Gold and Silver bearish engulfing candles form

Gold

1. Gold I expected further gains this week to 2599/2602 & this next target was hit yesterday on the 0.5% rate cut. In fact we made a new all time high exactly here at 2599.

2. However prices then immediately collapsed to 2546 leaving a bull trap & bearish engulfing candle on the daily chart in overbought conditions. This is the danger of trading big news events of course.

3. I am not going to take this as a sell signal just yet, but it is a warning to bulls & could see us unfortunately trade in yet another a sideways consolidation in the coming days, possibly weeks. We are getting used to these sideways pattern recently in Gold.

4. If we do make a break above 2604 we should target 2620/22 but this is looking unlikely at this stage.

5. For now I will still be a buyer on further weakness (& it is likely we will see further profit taking to the downside).

6. We could fall as far as the previous all time high at 2531/2526 where I would try longs with stop below 2521.

Silver

1. Silver reached 3125 but then unexpectedly crashed to 2968, leaving a huge bearish engulfing candle that wiped out the price gains of the last 3 sessions. This is an important bull trap in overbought conditions.

2. If you tried a long at support at 3010/2990 & managed to hold on in the volatile conditions we are headed towards the 1st target of 3040 & could even reach 3070. However gains are likely to be limited with bulls unexpectedly caught out yesterday.

3. It looks like we can continue lower in to the end of the week eventually & target support at 2945/35. Longs need stops below 2920.

4. If this trade fails we are stuck in the longer term sideways trend & we will find it difficult to identify low risk trades.

WTI Crude October future

Last session low & high for the October contract: 6973 - 7148.

(To compare the spread with the contract that you trade).

1. WTI Crude we wrote: could be edging higher, back to the break point of the longer term 18 month trend line at 7110/50...I hope to sell at 7110/50 & stop above 7200.

2. This trade was been triggered as hoped, with a high for the day exactly the resistance yesterday, before we hit the 1st target of 6990. I think there is a good chance we continue lower towards 6890, perhaps as far as 6790 in to the end of the week. It may also be worth selling on a break below 6840 to target 6800, 6730/20 & perhaps as far as 6660.

3. Try longs at 6550/6500 if we get a chance today with stops below 6400. Targets: 6690/6720, 6800/6820, perhaps as far as 6870/6900.

4. A break below 6400 signal further losses which could be as far as the 500 week moving average at 6200.