Gold And Silver Update

As I mentioned the other day, my upside targets for gold and silver have been reached so it's not a surprise for me to see today's big down move. If you look at the above chart of SLV which is the silver ETF, you will notice a bearish engulfment pattern taking place. Gold (GLD) also has a similar pattern.  The fact that this bearish engulfment is taking place following a very overextended rally leads me to believe that a pullback is about to unfold. Notice the heavy volume today which may be a sign of a climax.

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I am not bearish on the metals but I do feel that existing longs should look to raise their trailing stops to lock in any gains that they may have. On Friday if we see a move below today's low, that would confirm (at least to me) that some kind of correction is about to take place.