Right after sending the previous message to you the market moved considerably higher, thus touching the lower borders of the target areas for this rally. It was not reached for silver, but it was the case for gold, and mining stocks, and since these markets usually move in the same direction (especially in the short run) it seems that it might be a good idea to close one's speculative long positions in silver as well.

That is correct, we believe that it is a good idea to close one's speculative long positions in gold, silver, and mining stocks today. At the same time we don't recommend opening short positions - yet. It seems that this rally may take the precious metals sector even higher ($15 for gold or so), but that's not that far when one compares it to the risk of not being able to close the long position at all in the next few days if the market moves lower immediately.

The risk / reward ratio (that we often use to manage trades) favors exiting one's speculative long position but does not favor betting on lower prices yet. The reason is that betting against the main trend (which is up for the precious metals market) involves more risk than betting on higher prices (you could just wait out any corrections and still gain in the long run if you're wrong about a particular rally, but the same is not true for a decline - you could lose more and more as precious metals rise further). We will naturally get back to this topic if we believe that entering a bet on lower prices of gold, silver and/or mining stocks is profitable.

Thank you.

Sincerely,
Przemyslaw Radomski