Briefly: In our opinion, full (200% of the regular size of the position) speculative short positions in gold, silver and mining stocks are justified from the risk/reward perspective at the moment of publishing this alert. In other words, we are doubling the size of the previous short position.

We just finished writing an intraday alert for you about how nothing really happened based on the U.S. jobs report and just as we finished the last sentence… Silver took off. It's now about 25 cents higher than it was at today's intraday low. Consequently, we're writing a fresh analysis right from the beginning.

In today's regular Gold & Silver Trading Alert, we wrote the following:

"The white metal could still rally today or in the next few days, perhaps to $16.65 or so and decline from there. It seems that this level would correspond to the $1,335 target for gold and it would fit the analogy to late November 2017."

Kitcosilver.com reports today's intraday high at $16.73 and finance.yahoo.com reports today's intraday high at $16.66. Our target was reached.

Our target for gold was $1,335 and the fact that silver reached its own target while gold didn't and it's more or less at yesterday's closing price, only makes the situation more bearish. It means that the white metal is once again outperforming on a very short-term basis, which is a classic sell signal.

The general stock market moved higher today, so some may say that this is the factor behind silver's outperformance, nothing else. If this is the case, mining stocks should be reacting as well, but they are basically flat.

Assuming that the reason behind silver's and miners' performance is the general stock market, we have lagging mining stocks, which is bearish.

Assuming that the general stock market is not the reason for silver's and miners' performance, we have outperforming silver, which is bearish anyway.

The situation was bearish based on multiple long-term and short-term factors and we have received a strong bearish confirmation earlier this week, when silver soared and mining stocks underperformed and if that wasn't enough, we are seeing another similar confirmation today. All that at the triangle-apex-based reversal (precisely, in its near proximity).

Consequently, we think that doubling the size of the current speculative short position is now justified from the risk to reward point of view.

Based on the triangle apex reversal, we could still see 1-3 days of higher prices (after which PMs would slide anyway), but in light of the way silver and mining stocks are performing today, it seems that the scenario in which we see a sharp decline is more likely.

As always, we'll keep you - our subscribers - informed.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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