The market rallying while silver and copper get raped makes no sense to us — we see it as Friday version of musical chairs. The bulls are trying to keep the range ($SPY August low 110.27 still hasn’t been breached) and traders are nervous that they will miss out on a potential rip due to weekend fiscal intervention headlines. That’s definitely a possibility but nothing we’d want to bet our money on (short or long)– especially if the recent past is any example.
We don’t think holding the lows now would be a good thing for the bulls — it would just extend the range-bound tape. We want a flush, new lows, and a cleansing. And most importantly we want the commodities to show strength first — they started the down-fall and we want them to start the rally, whenever that may be.
If you are an investor/swing-trader who got clipped this week — remember — the more you try to make it back the harder and more dangerous your trading will become. The market doesn’t care about your PnL. Get involved whenever there’s good risk/reward set-ups, whenever that may be, regardless of how much you have to “make up”.
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