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 morning traders, Bit of a scare last night. Gmail made some changes and didn't tell anyone. I thought I had lost my entire gold group list. Don't you just love and hate modern technology at the same time? I wish everyone a Happy Easter and ask that each of you take just one minute to reflect on why we have this holiday before the socialists take this away from us too..... (one minute).....Ok, lets get to it. Pull up the July silver chart. You will notice that there are gaps starting at the $29 level. These gaps continue all the way up to the current price. We have what is called an "island top" formation. Read this loud and clear. GAPS ARE MADE TO BE FILLED!!! ...and ISLAND TOPS SINK... . THIS IS NOT A HEALTHY MARKET. Options expiration is next week. PRAY for a correction. We need it badly. If we don't get it, the whole country will be in deep trouble. The profits we have taken over the last 60 days are staggering. The best we've ever done. EVER. If we can return to a healthy market, we will do much more. As I see it, we need to correct to about $32 to $34. Looking at the chart, we SHOULD correct to at least $38, but we NEED to correct to $32 and there is a slight chance we MIGHT correct to $29. A correction anywhere near any of these numbers in the next week will cause many people to have near religious experiences if they are long this market. You should all be out of your core positions and holding only insurance and pipe dreams right now. I am holding $50 calls and $38 puts. I placed these positions weeks ago. DO NOT follow me. It's too late. I am playing both sides of this market. This should only be done by very experienced and advanced traders. ....This is the game plan...IF WE CORRECT by Wednesday or Thursday, try to buy the July AT THE MONEY calls or IN THE MONEY calls. I prefer calls that are at least $2.00 below spot. These usually cost about 10 or 12 thousand each but they are the safest and the least likely to be shaken out of. IF WE DO NOT CORRECT, ...WAIT!!!...until we do. THIS IS A VERY DANGEROUS MARKET. Those of you who are holding physical metal,...DO NOT let go no matter what happens. If it corrects, I believe the correction will be very short lived and we will return to making new highs quickly. This market has a very LONG way to go. The price of silver is going to go much higher than most folks will ever believe. I've been watching this market for 33 years and I know it well. History will record what we are seeing in silver as one of the greatest bull moves in all of recorded time. I simply do not have the time or proper platform to argue my case for this belief but I am very comfortable that time will vindicate me. IF WE DO NOT CORRECT... this market may go totally parabolic. Only those holding physical or long pipe dream options are going to be happy about it. Those of us holding cash ,waiting to get long, are going to be crying like babies and muttering "It isn't fair mommy." I'll repeat. PRAY for a correction. No, it is not blasphemous to pray for the financial health of a nation.( I actually had to answer this question a few days ago.) ....Aside from that, last months update resulted in more responses than ever before from all over the world. Not one was negative. Not even one piece of hate email. I was stunned. I have no idea just how many people read my ramblings but I'm very humbled that so many people forward them. ....God bless you all this Easter season....Happy trades....Chaz