February Gold is making new all time highs today, up $13.60 per ounce at $1181.00.  The included chart shows that the gold market is in very strong up move at present.  The directional movement indicators are bullish and the purple ADX line is now over an index level of 52 which is very over bought.

 Although I still believe that gold will eventually rise to $1350 in the first quarter of next year, that doesn’t mean that a large correction won’t happen along the way.  Don’t be surprised the see $50 to $100 corrections in gold from this point on.  Please do not try to play the corrections as these moves when they come will probably only last days before seeing sharp rebounds.  Trade with the trend only!  Be patient for chances to add to bullish trades.  Don’t chase this market right now!  This  increase in volatility was expected and the coming sharp drops are expected going forward.  As the volatility in gold and other commodities increase over time, you will see why I never recommended being in the futures contracts, buy rather call and put spreads.  The people in futures contracts will be humbled like no one’s business if they happen to be on the wrong side of an overnight $50 move.  Stay tuned because those days are fast approaching.  When the ADX line begins to bend over, prices will be vulnerable to a big drop.  Stay tuned.

 We were filled this morning on the February Gold $1100/$1130 call spread at a $22.00 per ounce credit.  The result is a gross profit of $1400.

 Don’t forget that we are still trying to buy back the four short February Gold ($935 strike) put options for $1.00 per ounce each.

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Long 2 February Gold ($960 strike) put options at $10.40 each.

Short 4 February Gold ($935 strike) put options at $6.20 each.

Long 2 February Gold ($970 strike) put options at $10.60 each.                  (February Gold options expire in 62 days).

Long 1 February Gold ($1140 strike) call option at $23.90.

Short 1 February Gold ($1180 strike) call option at $16.90.

Long 1 February Gold ($1175 strike) call option at $22.20.

Short 2 February Gold ($1225 strike) call option at $12.50 each.

Long 1 February gold ($1270 strike) call option at an average cost basis of $5.00 per ounce.

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Long 1 April Gold ($1210 strike) call option at $33.00.

Short 2 April Gold ($1300 strike) call option at $17.50 each.

Long 1 April Gold ($1275 strike) call option at $17.80 per ounce.                  (April Gold options expire in 120 days).

Short 2 April Gold ($1400 strike) call options at $9.90 per ounce each

Long 1 April Gold ($1375 strike) call option at $11.80.

Short 2 April Gold ($1500 strike) call option at $6.90 each.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.