No Comments Written by Anthony Truong on April 3, 2008 – 10:21 pm

If I were to ever give a recommendation (which I can’t and won’t), I would say now would be the time to short gold and silver like you’ve never shorted before.

Whilst the stock indexes are still quite difficult to read (I’m leaning towards a large triangle interpretation which means more choppy action over the next few weeks to a month), the patterns in these precious metals are so clear, I’m actually doubting my count! At the moment, it seems as though both metals have completed, or with one more “smallish” leg down they will complete, wave 1 of a larger wave 3 (labelled green in the Gold Daily Chart, red in the Silver Daily Chart) down.

If wave 1 was complete at 872.30 in gold, 16.362 in silver, then wave 2 has already topped and we are on the brink of wave 3 of 3 down.

If wave 1 is not yet complete (872.30 gold and 16.362 silver being the bottoms of 3rd waves within wave 1 down), then wave 4 of 1 has most likely topped with one more leg down to complete wave 5 of 1. Wave 2 up should find resistance at 900 gold and 17.00 silver, before a perfect set up for wave 3 of 3 reveals itself.

In either case, at current levels, where gold is trading slightly below 900 and silver bumping along the 17.00 level, it would be ideal to take an intermediate position to the downside.

I am looking for temporary support in the 800 (then subsequently 600) region for gold and 11.00-12.00 silver, with more downward movement to come in the long term.

DO NOT TRADE THIS ANALYSIS UNLESS YOU CONCUR WITH MY COUNT AND HAVE RISK CAPITAL THAT YOU ARE WILLING TO LOSE IF THIS IS THE WRONG INTERPRETATION.