GOLD AND SILVER

There have been some predictions posted on the blog over the last couple of months related to gold and silver. My recent prediction was that I thought gold would eventually make one more move higher before starting a bigger correction. I said that it could continue to fall in the short term, but that it should eventually make a new high. I still feel like this is possible for gold. Many of the postings on this site are predictions or recommendations. They are not absolutes or guarantees. I've said over and over and over that no one can know the absolute future movement of a stock. This is why it is so critical that you use Money Management and Trade Management. As I've seen from a few recent emails, many are gambling on the stock picks and recommendations. They are betting that a pick will work out. They are not trading the pick, they are gambling on the pick. I hope everyone understands the difference. The bullish recommendations on gold were made when the stock was still above (or very close to) its 50 day MA. The GLD has been below its 50 day MA since January 13th. It has been below its 10 day MA since January 13th. Every trade needs to be managed. You don't have to use a stop on your option trades. If you don't use a stop, you need to realize that you are risking the entire amount of money that you are putting into the trade. If that money disappears, you had better been prepared to accept that risk. Please follow the principles I taught you in the course. They work....and more importantly, they will keep you out of trouble.

Having said all that....gold and silver could bounce soon. They are nearing some support. If you are underwater in your gold or silver trades...and you are nearing the expiration date on your options, you need to look at ANY rally as a way to exit those positions at a smaller loss. If the trades are over a 60% loss, there will not likely be a reasonable probability to breakeven. Knowing that, you should look to sell out if there is any significant rally.