We sent this off to our subscribers (in the newsletter) after the close today:
Usually we’d be in anticipation swing mode right now — that is, putting on positions that we think will hit tomorrow. We held off as we didn’t like the risk/reward as we found good arguments for both sides.
For the bears:
1. We don’t have enough set-ups we love — it really is still slim pickings. However, once we break through the range this will change fast.
2. The volume is atrocious. Note how the Euro ($6E_F) is doing nothing (i.e. not confirming today’s rally) — and currency traders (also bond and commodity) tend to be more “right” than equity traders. Equity traders running up the market on no volume for a Thanksgiving rally.
4. The “solution” to the Euro mess will likely involve money printing so why are gold/silver stalling?
For the bulls:
1. The resilience of this market is astounding. No matter how bad the news, and yields surging in France this morning was pretty dismal, the bulls buy the dips. This is a huge point.
You take all these arguments together and what happens is it puts us on the side-lines. The risk of a break-out head-fake we believe is too high for us to anticipate anything right now. There will be easier markets to trade and this certainly isn’t one of them.