PRECIOUS METALS UPDATE

This post is from a commodities trader that writes a monthly newsletter on the precious metals market. He is a current Option Magic student and has agreed to post his newsletter on this blog so that you can benefit from his experience in the gold and silver markets. As a disclaimer...I (and Option Magic) are not responsible for the content or recommendations in this newsletter. You can trade precious metals in the equity markets using ETF's. Some of the main ETF's you can use to trade gold and silver are the GLD for gold and the SLV for silver. You can also use IAU, GDX, and GDXJ. I also like SLW as a way to play silver. There are also options available on these ETF's. Thanks Charles for your insight on this market.

Hello traders, Its time to suck down some caffeine and pay attention. Exciting news is on the wind. Some of you know that I frequently take financial education courses. I am a firm believer that any day that goes by without learning something new is a day that has been totally wasted. I have recently taken an excellent course on stock options that I am VERY pleased with. Most of these course's cost thousands of dollars so they are not for everyone. If any of you have a desire to learn more about stock options, email me and I'll pass the info. It's a very good course. It has changed my whole outlook on option trading. As a result of taking this course and getting to know the instructor, I have been invited to submit articles on the metals markets that will be posted onto his blog. As a result of this invitation, I have decided to ramp up my postings on a more frequent basis. Since this event happens to be coinciding with what I believe are about to be major moves in the metals markets, I am sure that many of you will be pleased with this decision since a large number of you have informed me that you have profited very well from my commentary over the last few years. Congratulations to all of you who have been with me since I started this seven years ago. You have done VERY well, but the best is yet to come. Without any further ado, lets get on to it......GOLD...We will start with a quick review of the barriers. They are, 1444,1521,1600,1650,1681,1764,1849,1936,and 2025. (These numbers are provided courtesy of Jim Sinclair , whose opinion I deeply respect) These numbers will act as RESISTANCE and then SUPPORT after they are broken and surpassed. REMEMBER, there will be battles around these numbers above and below until a clear break takes place. It usually takes about three assaults on a barrier to break through but not always. Sometimes , it just blows through. The gold market is looking very bullish. I see NO REASON to change my belief that gold will hit 1624 on or before Jan. 14th. Jim Sinclair picked this date and target price. After reviewing the evidence, I am in total agreement. NOTE... I am NOT saying gold will CLOSE at or above this level by 1-14-11, I am saying that it will at least REACH this level during interday trading and then fall back, probably to the 1525 area or possibly below. This is NOT a science. It is a highly educated guess on the MOST LIKELY probabilities of what will occur based on the analytical evidence we have available. I believe we will soon see days with $100 swings. This means VERY volatile moves. Then it will settle down and retrace until it is ready to make the next assault. This will be repeated over and over for the next few years. Some of these moves are going to cause some traders to have religious experiences. I STRONGLY recommend that you DO NOT trade futures contracts from NOW ON. Its just too dangerous. Trade options only. Gold stocks are a good play. Just make sure the company isn't hedging. Hedgers will suffer badly. And remember, most gold mining companies are nothing more than a hole in the ground with a liar standing over it and pointing down......SILVER...OH BOY, OH BOY, OH BOY. The March silver chart looks VERY GOOD. EXTREMELY BULLISH. Several months ago, I told you my best guess for silver was anywhere from $30 to $60 by Christmas. We are at $30 now and I expect this week will be very bullish. The chart is beautiful. I will not be surprised if silver is near $32 by Friday. And I don't think $34 is impossible. Silver is EXTREMELY difficult to predict but I am SURE this market will EXPLODE in the near future. Maybe this week , maybe in 6 months, maybe 12. I think by mid summer, I'm going to have a hard time slapping this grin off my face. I wish I could give you barriers for silver but I cant. This market is just too hard to predict. It has to be watched daily and can change with no warning. My only consolation is that I believe I've been a lot more accurate about this market than most of the newsletter writers. ....DISCLAIMER.... I COULD BE WRONG!!!... But I don't think I am. MAKE YOUR OWN DECISIONS ABOUT YOUR TRADES. I ask nothing for the info I give you. Use it as you deem fit but DO SO AT YOUR OWN RISK. I have tried VERY hard to give you sound information based on a lot of hard work. I hope that those of you who choose to use it will profit handsomely. Kindest regards and HAPPY TRADES to you.....Chaz