Equities Following Precious Metals

A couple of days ago I wrote about how precious metals had formed an upside down head and shoulders pattern and have since broke out.

Gold:

Silver:

Right now looking at the major American equity indexes they seemed to have since formed their own head and shoulders pattern and broke out today.

S&P 500:

Nasdaq:

Russel 2000:

What troubles me about these patterns is that the right shoulder seems to be pretty sloppy on all three of them. Moreover, their breakout occurred on very low volume making them more failure prone. On the short term I think both the precious metals and American equity markets are bullish.

Reversal for Gold and Silver

Gold and Silver had broke out from a long consolidation in early August and have since receded to that breakout point. It now looks like they are making a short term reversal, in the form of an upside down head & shoulders, from that point. Moreover, the last candlestick on both of them appears to be a breakout, giving them bullish indications.

Gold:

Silver:

If the last candlestick is a true breakout, one can expect a target price of around $1780.00 on gold and $34.50 on Silver.