Today the FOMC has announced its decision on tapering and interest rates. There are a lot of theories on what they might or might not do. And we know the FED is a bit clueless without much common sense relying on their 100-year-old models. The odds of the FED doing anything the right way are remote, but even a clock that is broken is right two times a day.
With this runaway inflation, which has been calculated in favor of the government, PPI and CPI are hot but much hotter than has been reported. The exclusions from all of these reports are laughable. Silver, platinum and gold have been under a certain amount of pressure for the last few weeks, which tells us that they are expecting a dramatic decision coming from the FED soon.
The metals are weak; upcoming news for metals will not be favorable in the near term. There is the possibility for a hard sell-off which will depend on what the FED does today. The target for Gold is at $1450 on the downside. However, there are a lot of levels that might prevent a sell-off that big from occurring.
We must keep an eye on the price without our opinion and realize that some of what is expected might already be priced in. Keep your opinions out of it and paper trade; invest in physical. We’re short and will stay there until there is a change to the algorithm.
In all of the markets, price action will determine what will happen in the following day, week, or month. Make sure you keep these two strategies separated. The worst trade anyone could make is turning a trade into an investment while hoping for a way out. Investors must learn to take their losses at the right time and move on to their next trades. You can’t win them all, it’s important to keep emotions out of the trade, which is a common issue with most inexperienced traders.
Money management, discipline, and Patience always win the day. Try to let the map of the markets lead you in the right direction.
Author: Scott Dowdy