February Gold is up $11.00 per ounce this morning at $1103.50 as I write. The included chart shows that February Gold is starting to show some support in the $1075 area on the bottom side and resistance in the area of the downward sloping 40 day exponential moving average at about $1115.00. The directional movement indicators are bearish but narrowing and the ADX line continues to edge lower. We will need to pay close attention to the trading action in gold over the next few trading days to see whether the $1075 support will wind up being the lows for this major correction. We will alos have to keep an eye open for technical signals that a new bull move is beginning. There no confirmation of that yet. This could just be a resting point before gold tests down towards the $1045 Indian gold purchase levels. 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 26 days).
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 84 days).
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.