Gold & Silver Completing Declines
05/28/16 Weekly Re-Lay:
“Gold & Silver declined further after fulfilling their upside objectives for the first half of 2016. That was expected to spur a pullback into late-May. Traders should be holding partial Gold & Silver longs from mid-Dec., w/open gains, and have exited Gold put options w/avg. overall gains of about $1,950/option…
Gold & Silver continue to drop after attaining their 3–6 month upside objectives – the overall upside targets for the first half of 2016 – at ~1305–1315.0/GC & 18.040–18.140/SI. That ushered in what could be a multi-month period of volatile congestion and/or significant correction.
Those price levels remain the most significant resistance for 2Q 2016 and were the primary targets for the latest advances in Gold & Silver – the 5th waves of their initial impulse wave higher, from the mid-Dec. ’15 lows. By attaining them this quickly, Gold & Silver have created the need for a serious correction to allow enough time to transpire before the next wave up.
Last week’s 2 Close Reversal lower corroborated that and projected 1–3 weeks of additional downside follow-through… Gold just retested its March & April lows while testing & holding its weekly 21 Low MAC, so it could find some support here.
Silver is also testing key support – which includes the level of its previous (March 2016) high – around 16.20/SIN. That could spur a quick bounce in the coming days… potentially stretching into the next phase of Silver’s ~30-degree cycle onJune 2nd/3rd.
With Dollar cycles bottoming in early-May – and the potential for global equities to accelerate lower into late-June – at least two potential deflationary factors could amplify this volatility into mid-2016… and create plenty of wild swings…
3–6 month & 6–12 month traders and investors should be holding partial (~ 50%) long positions in Gold & Silver from mid-Dec. (~1046–1076/GC & 13.62–13.88/SIH). Hold these until [Refer to May 28, 2016 Weekly Re-Lay for specific trading strategy, particularly now that Gold & Silver have fulfilled most of downside potential. Quick, sharp rebound – intoJune 3rd – is possible if May 31st triggers reversal higher.].
Traders could have been long June Comex Gold 1250 put options at 2.00–5.50 and exited half of these around 19.00 – with avg. gains of about $1,500/option – and the other half before expiration, between 27–29.00, with avg. gains of about $2,400/option…
Gold & Silver remain negative but are testing intermediate support levels. As a result, a 1–3 day bounce could take hold. Watch June 2nd or 3rd for a rebound peak if that is the case.
If Gold & Silver rebound without turning their daily trends back up, it would set the stage for… [Reserved for subscribers only; See May 28, 2016 Weekly Re-Lay for additional analysis related to near-term potential for quick rebound into June 3rd…. and what could follow that.]”