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Conversation Between Traders Is the Bull Dead in GLD SLV

|Includes: SPDR Gold Trust ETF (GLD), SLV, SPY, USO

From a reader/ and fellow trader on late Friday afternoon 4-29-11

Jeff-  Something us up. I am closing half of my position here, and the rest if it starts coming down.  

My reply back on Monday morning 5-2-11

     Good move!- I had closed out 1/2 of my GLD and 1/3 my SLV options. Then- lucky me had stop limit orders in Gold, wasn't touched, and Silver which didnt get filled due to such a large drop and blew past my limit price... The one time I use Stop Limit instead of Stop orders ... Who would have thought they would finally get Bin Laden!?!

     Anyways, I am currently watching the Precious Metals market come back up. FYI... I am glad SLV cooling a little; current Gold/Silver ratio 34.5-1 so they (GLD, SLV), should hand step together back up and test some more new nominal highs. The downward spike in SLV stopped and did not break out of the accelerated up trend channel and did not come near actual bottom line/boundary of main up trend channel.

     So I still have half 1/2my GLD and 2/3 my SLV options. I am seriously thinking about adding more May Calls. My targets still remain unchanged $155-$160 GLD, and $50-$55 SLV; before the big downward correction. Then approx 30-35% retracement before launching on next upward leg which will eventually see $2000-$2500 Gold, and $75- $100 Silver.  I do believe in my heart that we will actually set not nominal but real time all time highs for Gold and Silver even adjusted for inflation.

Next area to worry is when S&P hits the upper level or channel line next time, then think will see reverse in US Dollar, S&P major correction (to agree with old saying sell in May and go away). And Yes- some big corrections in GLD, SLV during the UUP or US Dollar recovery/rally. Other indicators will be the failure of the Euro between $1.50 - $1.60 level. Then will be time to place big shorts in Euro, S&P, GLD, SLV, and USO; while Long US Dollar. I will let you know when about to happen and that is my current take for now on the Bull Market in Gold and Silver.

Good Luck for Both of Us and Even Better Investing!

Jeff