February Gold is down $1.70 per ounce at 1106.30 this morning as I write. The included charts shows that near term on this bounce, February Gold is beginning to have some trouble with prices very near the brown 40 day exponential moving average in the $1115.00 area. So, near term, February gold seems to have near term support right along the 90 day exponential moving average, in the $1075.00 area growing resistance along the 40 day average in the $1115.00 area. The directional movement indicators are still bearish but narrowing and the ADX line continues to fall. The longer term trend for gold is up, and we need to stay focused on this correction to get ready to add to our long positions. If and when the gold market gives me some clear signal of another bull move, then I will look to be more aggressive to add new positions.
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 28 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 86 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.
