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/Market Trend Signal) 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...and have a very Happy Birthday!!!!


Good morning Traders ! Yes, I have heard your many cries for comments. My email is filled with them. I have deliberately refrained from making any comments these last few weeks because I saw NO REASON to change my opinion on this market. Time has proven me correct. This market has preformed exactly as I expected it would within a 10% margin of error. (or less)...........Today is the occasion of my 54th birthday. The Good Book tells us that it is more blessed to give than to receive so with that thought in mind ,I wish to celebrate my advancing decrepitude by giving you my best call on how to play this market over the next few months. So , without any further ado , lets get to it. .....Some time ago , I said you could expect to see $100 swings in gold and $5 swings in silver in a single day. This came to pass some weeks ago. I am now telling you that this will soon be the norm. Maybe sooner than anyone is prepared for. Triple witch is once again upon us which means this is a buying opportunity. I made it loud and clear that the December 40 silver calls are the place to be. For Jerry's followers, that would be the Jan 40 SLV calls. These calls are in the money and pricey but I am VERY confident that they will be stellar performers. An interesting note here, triple witch falls a week before option expiration this month. A rare event. Hard to call how this will effect the closing price of the October options but I suspect a drop in gold to perhaps the $1750 level yet interestingly enough I don't really see much further drop in silver from its current level of around $40.50 . Regardless, whatever the metals drop too, it will be VERY SHORT LIVED. BUY YOUR CALLS NOW. You may not get another chance. Silver is about to make a VERY large move. I have NO DOUBT there will be a number of attempts by both the short selling banks and the government to interfere in this market to keep prices suppressed but I do not believe they are going to be able to control it. Time and this platform do not allow me the luxury of explaining the many variables affecting this market so I must ask that you consider my track record for accuracy over the last year and trust what I am saying here. And, YES, a very large amount of my money is where my mouth is. I'm not in this for chump change or beer money. I am positioned to make a very healthy 7 digits on this move. I DO NOT recommend you go all in on this. Trade ONLY what you are willing to lose. Good money management is mandatory for a successful trader. As a side note, watch for the banking sector to take a really big hit in the next few months. The big question everyone wants to know is where do I think the metals will end the year at? I hate sticking my neck out on this but...Gold...$2000 is highly probable, $2250 is likely and $2500 is certainly possible. Silver..... $55 to $60 is very highly probable, $80 is likely and $100 is certainly possible. Especially on an intra day move. Does that mean the metals will hold these levels? NO!!! Corrections are inevitable and WILL occur. The best way to play this market is to buy 10 plus options . Sell one third of your position when the first target is hit. Wait for the correction (if there is one) and the continuing rally to the second target to sell a second one third of your position. You should have VERY heavy profits at this point. If the third target is reached sell only 2/3rds or your remaining position and hold the last 1/10 position for a parabolic moonshot possibility. Do NOT expect this market to play out this way. The odds are very favorable that the first two targets will be reached but the last target is an educated guess that is very likely but has no guarantee. Once again, I do not make predictions on what a market will do. I simply analyse a market for all possibilities and by process of elimination select the probability of what I think is most likely to occur given the information I have available at the moment. And please remember, that information is constantly changing and can affect my opinion very quickly. ....I expect this market will become VERY volatile and brutal over the next few months. You must watch your positions daily. SELL when the targets are hit. Don't be greedy. We have a very long way to go with this market over the next few years. I will try to have short comments as needed over the next few months. Happy trades............Chaz Sept 15, 2011

Thank you Chaz! We all appreciate your contribution to this blog.