http://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=0&mn=9&dy=0&id=p15218233755&a=236108789

We traded the flag here in silver in August and made a little profit.  We remarked on it at the time.  The power bar at the end of the flag faked us out and we were in then out.  We thought all of the activity suspicious, though failure to challenge the old high should have provoked a short, especially on the gap.   Now it strikes us there is no doubt and we have shorted it with ZSL.  We don’t think this is a high priority.  But it certainly is a high priority not to be long.

The same thing is true of gold.

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=5&dy=0&id=p95239461628&a=255869372

Gold has had a very similar pattern to gold, including a flag like pattern.  Now it has dropped away and we shorted it with GLL.  Once again you might not want to short it, but you certainly shouldn’t be long unless you are trading a weekly basing points system.  A question we will address in our next letter.