February Gold is down $$19.50 per ounce at $1116.70 this morning as I write. The included chart shows that yesterday’s rally was just a one day bounce in this downward correction. I am sure that the very strong dollar is putting the pressure on gold and other commodities today. The directional movement indicator is bearish and the ADX line continues to fall. We currently have a few ratio call spreads out to April. My goal is to eventually buy back the short calls that are involved in those spreads. The strike prices involved are the April $1300’s, $1400’s and $1500’s. Those strike prices are still too expensive to buy back yet, and the gold chart still suggests that gold is going to trade lower first, so we will be patient and wait. I still expect to see gold trade below the $1100 area, and possibly fall back to the $1050 area. We shall see.
Long 2 February Gold ($960 strike) put options at $10.40 each.
Long 2 February Gold ($970 strike) put options at $10.60 each.
Long 1 February gold ($1270 strike) call option at an average cost basis of $5.00 per ounce.
(February Gold options expire in 40 days).
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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.
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.
(April Gold options expire in 98 days).
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.
