Although I’ve suggested covering a short position in gold futures, this vehicle’s steep decline over the last six weeks looks like it has farther to go before a firm bottom is reached. Not only is the unfulfilled downside target at 99.54 still in play, GLD would become an enticing ‘mechanical’ short on a rally back up to p2=103.15. The most bullish thing that could happen over the near term would be an uncorrected rally that exceeds the 104.65 ‘external’ peak shown (see inset). That would turn the daily chart impulsively bullish for the first time since August. For purpose of getting short at 103.15, use near-the-money puts if and when GLD gets within 0.10 points of that number. A 103.36 stop-loss is suggested. Alternatively, we can use the 15-minute chart (24-hour) to stake out a speculative long early in this rally. A pullback from just above Friday’s 102.46 peak (9:00 a.m. EST) could generate a camouflage entry opportunity with relatively little risk. _______ UPDATE (December 1, 6:10 p.m. EST): The pullback we were looking for has indeed occurred, but amidst such nutty price action that I will suggest another way in: bid 0.94 for four Dec 24 103 calls, good through Thursday and unless GLD slips below 101.50._______ UPDATE (December 2, 11:40 a.m.): The trade was canceled, since GLD traded down to 101.20 before the bell, and opened at 101.35. The weakness leaves zero doubt about where it’s headed next: to the 99.54 target flagged above._______ UPDATE (10:26 p.m.): If and when the downtrend hits 99.60, bid for four December 24 100 calls. I estimate they would be an excellent buy for around 1.36, but you can adjust the bid if it looks like they won’t come quite that cheap. I’ll post a stop-loss here if the trade fills, but no more than 0.20 -0.25 per contract should be risked.________ UPDATE (December 8, 1:27 a.m.): Elsewhere in today’s list of touts, I have provided a precise benchmark for turning the March Comex contract short-term bullish again. For this vehicle, it would take a close above 103.80, a midpoint hidden resistance, by no later than Wednesday (15-minute, a=101.61 on 12/3).
