Be Careful With GLD

I just talked to a member about GLD and problems that margin calls could create for GLD, the real ticking time bomb for GLD potentially is John Paulson's fund, his top 5 holdings include/included: BAC, C, AU, APC and GLD! It seems as if he has taken huge losses and likely closed the entire BAC position, the C position I believe is still very much alive. Here's C today.

C is another short we have looked at and is down over 45% from the Jan/2011 highs. BAC he took a bigger bath on which is down about 56% from the January highs, even if he managed to offload most of the position or all of it, he still took a 40+% loss on it. Cramer Called BAC a "Screaming Buy" in early January, almost as bad as his buy Lehman call. THIS IS WHY I DON'T TRUST CNBC. Cramer's allegiance is to his Wall Street buddies and his call created the last rally in BAC before it topped and sold off, giving some Wall Street firms a chance to sell into the rally. Paulson's AU position is down 14% for the year and APC is about break-even. Should Paulson's fund need to raise cash/liquidity, which it likely will with redemptions, his only way of doing so in his profitable GLD position.

I've been warning about GLD for several months, here's why..

 The GLD daly chart, which has been spot on, even calling the recent rally, is in bad position.

As is the hourly chart. These are warnings over the underlying action in GLD, it doesn't mean you can't trade them long, but you should be aware, have good risk management, a trailing stop and understand that there appears to be something under the surface brewing.

If Paulson liquidates his GLD holding's, GLD could be in for a nasty fall.