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Gold and Silver Pop on Inflation Concerns: GLD, SLV, GOLD, NEM, ABX, PAAS, SLW, SSRI, MCP, SOHU, GOOG, AAPL, TXN, NSM

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Gold and silver rallied today on inflation concerns, as China raised its rates once again!  Gold is at a new all-time high, trading above $1455/ounce.  Silver is nearing $40/bounce.  Gold and silver miners enjoyed a huge day:  GOLD +7.69% (it is now up almost $14, or 20%, in 4 days!), ABX +5.62%, NEM +4.38%, PAAS +3.67%, SLW +4.17%, SSRI +5.39%.  This is a big breakout for gold and silver; both should head higher!  $1500 gold is not that far away!

The market is pretty much progressing as forecasted this weekend.  Almost 3 weeks ago, in one of my evening articles, I noted 3 areas to trade on the long side, "...the 3 areas that I talked about today, namely coals, rare earth metals, and Chinese internets, could do well on the upside..."  To give some examples of how some of the stocks in these 3 areas did since March 22 until today, WLT went from $115 to above $140; CLF went from $92.5 to almost $102; SINA went from $90 to $115; SOHU went from $80 to 98; MCP went from $52.5 to $67!  We have been trading these stocks.  With MCP, we started with the Apr 50 calls, and, rolled up all the way to Apr 65 calls (see Trade Records Page) while pocketing profits along the way.  We had just finished a perfect week last week, and, since Monday, we locked in even more profits, including a +135% trade on the MCP 65 calls (which was riding completely on the house money):

  • April 05, 2011
  • 12:12 | HappyTrading CLF ($101.10) Sold to Close 04C100 Apr 100 calls, at $3.00 +25%
  • 07:25 | HappyTrading DECK ($89.20) Sold to Close 04C85 Apr 85 calls, at $5.20 +30%
  • April 04, 2011
  • 12:04 | HappyTrading MCP ($66.30) Sold to Close 04C60 Apr 60 calls, at $7.30 +135%
  • 07:40 | HappyTrading SOHU ($96.40) Sold to Close 04C90 Apr 90 calls, at $7.60 +69%
  • 07:21 | HappyTrading SOHU ($95.00) Sold to Close 04C90 Apr 90 calls, at $6.50 +44%
  • 07:04 | HappyTrading MCP ($64.50) Sold to Close 04C60 Apr 60 calls, at $5.80 +93%

(to subscribe to our published trades, please visit our Services Page or CLICK HERE to watch a step-by-step instructional video)

Yesterday, after the market, TXN announced a $6.5 billion deal to buy NSM, an near 80% premium!  NSM shares popped +71% today.  This big merger deal gave the techs some needed strength as investors speculate on the next takeover target.  However, the gains in techs were capped by weakness on AAPL and GOOG.  AAPL continued to slide as analysts upped their targets into the $400s.  GOOG was down mover than $20 intraday before finishing off $18.59, or 3.16%, as antitrust probe weighed on the stock.  In the Trading Room, we traded GOOG weekly 575 puts, which more than doubled in a few hours:

Happytrading April 5, 2011 7:53 AM
sliding back down... took a scalp on the weekly 575 puts this morning... support around $575-$574

Happytrading April 5, 2011 8:32 AM
a breakdown here could send it to test March lows, around $560...

Happytrading April 5, 2011 8:53 AM
coming down! $570 handle; 575 puts up another $1 at $8.5; take some profits now and see if $570 holds...

April 5, 2011 11:47 AM
Happy,Thanks for the heads up on the $575 GOOG weekly puts. In at $4.60 out at $9.90

Happytrading April 5, 2011 12:10 PM
no problem, hawkete! this is going to test $560! those 575 puts are over $11!!

The Dow was down 6.13 points; SPX slid 0.24 points; Nasdaq added +2 points:

GDX (gold miners) led the market with almost a +5% gain!  SLV (silver) was up 2.02% and GLD (gold) gained +1.58%.  XME (metals and mining) climbed +1.5%.  SOXX (semiconductors) bounced +2.27%.  FXI (Chinese ADRs) took a breather, down 0.76%.


SPX slide 0.24 point to close at 1332.63.  Its daily MAs turned up and MACD went higher.


Nasdaq added +2 points to close at 2791.19, having gone boave 2800 intraday.  Its daily MAs and MACD went up.

The market appears to be having a hard time breaking above February highs.  SPX tried challenging 1400 today once again, only got as high as 1338.21 before retreating to close just in the red.  Money seems to be rotating into gold and silver plays on inflation concerns.  The market has been rallying hard and fast since mid-March.  It is trying to consolidate a bit before earning season starts next week.  Meanwhile, gold and silver plays look to have more room to run higher. 

Good night and HappyTrading! ™

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