Gold and Silver Update

This post is from Chaz...a commodities trader that writes a monthly newsletter on the precious metals market. He has given me permission to post it on my blog. As a disclaimer...I (and Option Magic) are not responsible for the content or recommendations in this newsletter. Also...a lot of this information relates to trading the actual commodities. There may be some terms or strategies that you don't recognize. This update is meant to be an information guide for those of you that are trading gold and silver...or just the gold and silver ETF's like the GLD or the SLV. This commentary is opinion and analysis. You must still use good money management and trade management principles. You must also read the charts. No one...I'll repeat...no one knows the exact future of any event on Wall Street. You must still do your due diligence. Thank you Chaz.


Good evening traders. I recently received an inquiry concerning gold and silver stocks. Please pay attention here. The comments I make in this commentary are intended to relate ONLY to COMMODITY FUTURES. Specifically OPTIONS. They are NOT intended to relate to stocks or funds. These comments are NOT predictions. They are the most likely probabilities based on the most recent information available. The bear raid we are watching now will likely end tomorrow. My best guess is that the shorts will keep the gold price around its current range of 1332 and silver around 26.60 to 27.00 . The purpose of this is to insure that the gold 1340 (and higher) and the silver 27.00(and higher) options expire worthless. I noted with interest that the CFTC failed to implement its 60 day notice on position limits today. My guess is JPMorgan is begging for more time to unwind its massive short positions. It looks like they are going to get it. I don't expect much movement Wednesday but Thursday is another matter. There is substantial evidence to indicate that the next rally may be a big one. I think it is very likely we will see silver at 37.50 and gold above 1450. Gold may very well challenge the 1521 barrier. Everyone should still be in possession of all their options. I hope some of you were able to add to your positions at favorable prices. If not, Wednesday will probably be your last chance. When the rally does begin, its a pretty safe bet to expect it to rise rapidly. I will not be surprised if we see a whipsaw movement to the previous contract high. It might be a good idea to take a few positions off the table and ride the rest. Don't forget to roll out to the next month but wait for a little retracement to fatten your pocket. Might be a good idea to roll out by next Wednesday. ....Happy trades everyone....Chaz.....Jan 25,2011...8pm