SLV and GLD continued

Given today's downside volatility after a massive run-up in silver and gold prices we address both the iShares Silver Trust (SLV) and the SPDR Gold Shares ETF (GLD).

The big risk: Both SLV and GLD show climactic volume in the face of potential bearish reversals that warrant proper risk management or at least reduced long exposure to a comfortable sleeping level.

Similar to SLV (see prior blog post), the SPDR Gold Shares ETF (GLD) has also reversed lower on what appears to be climactic volume on both its daily and weekly charts. The weekly chart shows that GLD tends to consolidate or correct lower after upward spikes in volume, so the risk is for a "buying climax" GLD and a consolidation/correction lower.

The daily chart shows key retracement levels and rising daily moving averages (DMAs) as tactical downside level to watch:

• 452.56-451.70: 38.2% retracement of the late October into late January rally and the rising 13-DMA.

• 434.91-430.22: 50% retracement and rising 26-DMA

• 418.45-417.26: Chart levels, rising 40-DMA, and 61.8% retracement

The 495.88-509.70 range offers tactical resistance.

The long upward tail on GLD's candlestick chart with climactic volume also increases the risk for a "buying climax." This week's candle is a potential bearish shooting star. See Chart 2 below.

Chart 1: SPDR Gold Shares ETF (GLD) (top) and volume (bottom): Daily chart

Chart 2: SPDR Gold Shares ETF (GLD) (top) and volume (bottom): Weekly chart