February Gold is up $6.10 per ounce at $1110.90 this morning as I write. The included chart shows that gold is bouncing off of the recent price lows. So, is this the beginning of the next bull market leg to the upside? The directional movement indicators are bearish but narrowing, and the ADX line is edging lower. This all suggests to me that it is possible that the low is in, but that there will probably be some more back and forth trading before the next bull leg is ready to take off. Stay tuned.
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 29 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 87 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.
