Yesterday's excitement in gold turns into today's nightmare

New York (Mar 18)  On Tuesday, the gold bugs got excited again at the possibility that the yellow metal was breaking out to the upside. This morning, the longer-term trend returned and gold is getting hammered. As we wrote yesterday, the metals are going lower and the rally was meant to be sold.

It’s a funny thing about trends – they tend to continue in the direction they are going. Understanding how to trade them is another story. Trending markets create big moves in the opposite direction almost designed to fool the average trader. Tuesday’s rally in metals actually showed weakness and should have been sold.

We continue to be short and sellers of rallies across the board. Silver, platinum, gold and copper are in downtrends and should be sold at resistance levels. Eventually this trend will reverse, but for now, the trend is down and short is the right side of the market. Don’t get caught up in phony moves. When the trend changes, we will reverse and not a minute before.

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