February Gold is up $6.40 per ounce at $1100.40 this morning as I write. Gold closes for trading today at around 11:30 AM, so this is a very short day ahead of the Christmas holiday. The included chart shows that gold is in the second day of a bounce off the recent lows. This does not mean that gold is beginning its next big rally yet. Gold did almost this exact same thing six and seven trading days ago before dropping another $70 per ounce. For the bulls, we need to see gold bounce sharply in here right now, then you want to see gold come back and retest and hold before rallying again. Stay tuned. For now, I am happy with the positions that we already have in place. When the bull trend in gold appears to really be starting again, then I want to add to our bullish positions. Stay tuned for that as well.
Followers of this newsletter should have the following positions:
Long 2 February Gold ($960 strike) put options at $10.40 each. (The cost basis is zero if you consider the profit made on the short $935 puts that were associated with this trade originally).
Long 2 February Gold ($970 strike) put options at $10.60 each. (the cost basis is zero if you consider the profit made on the short $950 puts that were associated with this trade originally).
Long 1 February gold ($1270 strike) call option at an average cost basis of $5.00 per ounce.
(February Gold options expire in 33 days).
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Long 1 April Gold ($1210 strike) call option at $33.00. (The cost basis is now $23.00 if you consider the covering of the one short April Gold $1300 call option on December 22nd).
Short 1 April Gold ($1300 strike) call option at $17.50 each.
Long 1 April Gold ($1275 strike) call option at $17.80 per ounce. (The cost basis is now $11.90 if you consider the covering of the one short April Gold $1400 call option on December 21st).
Short 1 April Gold ($1400 strike) call options at $9.90 per ounce each
Long 1 April Gold ($1375 strike) call option at $11.80. (The cost basis is now zero if you consider the covering of the two short April Gold $1500 call options on December 22nd).
(April Gold options expire in 91 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.
