I am providing tracking guidance for a round lot whose cost basis has been reduced by profit taking to 33.85. Since there’s upside potential to 49.54 (see inset), we’ll have time to augment our position ahead of any big move. The last time we attempted to do so was by bottom-fishing a midpoint support that got taken out. If we try this again, it will be with the expectation that corrective abc patterns do not exceed their respective midpoint supports. Moreover, if GDXJ is ‘bulling up’, we should start to see rallies exceed their D targets. _______ UPDATE (Sep 9, 8:04 p.m.): The stock took a Whoopee Cushion bounce from a low that was 16 cents above a target I flagged in the chat room. The fact that the downside target wasn’t quite reached is mildly bullish, but GDXJ will now need to exceed last Friday’s 39.59 peak to ‘actualize’ the bullish potential thereof. _______ UPDATE (Sep 15, 1:03 a.m.): The stock (ETF) continues to screw the pooch with feints to within an inch of the 36.60 target flagged a while back. Since our low cost-basis has provided a comfy profit cushion, I was prepared to ride this position into oblivion rather than bail out. This is mainly because managing the risk of bullish positions in this vehicle has been far more trouble than it’s worth. Instead, I’ll suggest doing another covered write if there’s a decent rally this week. Stay tuned to the chat room for real-time guidance._______ UPDATE (Sep 18, 1:25 a.m.): Interest in this vehicle seems to have evaporated. Since no one acknowledged my query in the chat room about the covered write, I’ll assume a mediocre fill of 1.15 for a Sep 26th 38 call shorted at some point during the day. _______ UPDATE (Sep 22, 10:23 a.m.): Let’s continue covered-writing our round-lot stock position by rolling the call. Accordingly, sell the Oct 37-Sep 26 38-strike spread once for 0.40. The price should be adjusted up or down on a 33-delta basis, meaning you should increase the spread price by a penny for each one-penny move in the underlying, using 37.50 as a benchmark. _______ UPDATE (Sep 24, 7:35 p.m.): Come Friday, you’ll want to roll the covered write forward by covering the Sep call (presumably for nearly nothing) and shorting an Oct 3 call. _______ UPDATE (September 29, 2:17 a.m.): We took in one thin dime on the roll, effectively lowering our cost basis to 31.20. Since no one has mentioned GDXJ in the chat room for weeks, I’m ‘delisting’ the tout. However, I will establish, and contintue to roll, the calendar spread, albeit at near-the-money strikes going forward.
