Gold (GLD) looks toppy here. We've tested $1250 3 times now and failed. There are no triple tops -- so Gold will eventually surmount this challenge. But there may be a pullback to the upper $1100s in the meantime.
I'd use this opportunity to write near-month (June) covered calls on any gold miner positions (GDXJ, GDX, GG) and to accumulate phyiscal Gold (PHYS).
I like the $31 June calls on GDXJ, the $55 June calls on GDX, and the $49 June calls on GG.
Subscribe to:
Post Comments (Atom)
I agree... Gold rose to its October 2009 level and has really struggled with that area. I think if we could have broken above $1250 we could have ran right to $1300 but now on the longer term chart it just looks like a 6 month double top.
ReplyDeleteWhat you have to worry about is if you sell the calls you really are not protecting your self very much... For instance the 31 calls on GDXJ are only going for 45 cents a piece.
So if you own 200 shares at $28.72 you have a $5744 position.... you sell 2 calls against that and you only collect $90 on your $5744 position. So you are only hedging 1% of your position in this example.... Maybe deeper in the money or farther in time?
I'm not trying to hedge even 10%. If I wanted to I would use a double-inverse ETF. I'm just trying to collect a few pennies from the steamroller.
ReplyDeleteIf you are looing at a weekly chart, those "spike tops" in October don't count from an analysis perspective as they weren't weekly closes.
One thing that does worry me though is RSI has not made a new high versus the old 2009 high.