Pullback continues

Recap & Stance:
We got a nice sell-off today and there was not even a hint of resistance by the bulls. However volume still remains relatively light, which is a good thing for the intermediate term bullish scenario.

As for our stance, we are still short term bears. The move down doesn't appear to be complete. We need some more time. As we mentioned in our previous posts, the area surrounding 760 remains our target. Infact, we would "ideally" like for the price to drop below the 20d moving average. This would drag quite a few bears on board and act like a false breakout on the downside. Note that this mere speculation on our part. Markets will act as they want. Our strategy is to start layering from around 760.

Trades:

We did not trade today, since we were busy. Gold broke beneath the bevy of moving averages. It would be bearish for GLD (and good for us) if we get a confirmation red candle close below the moving averages tomorrow. The encouraging thing for precious metal (PM) bears is the volume is increasing on the downside. Silver is still sitting on these averages - so we may see another bounce tomorrow. Eitherways, we still think PMs have 2-3 months atleast before the underlying bull market from 2000 re-asserts itself, which could propel gold towards 2000.