With the markets flatlining ahead of more drivel from Yellen, we considered a trade set-up in the E-Mini S&Ps, then moved on to yen futures and GDX. The latter is optionable, so we looked at shorting at-the-money straddles carrying premiums of about $4.50 for two weeks of duration. This would have been plenty of cushion for the steep rally that just occurred. The yen has been in a strong uptrend as well, and our focus was on ‘camouflage’ entry tactics to significantly limit the risk of buying into a mature rally. This is a must-view, since the ‘external’ peaks we would use for this purpose were as subtle as they come, recorded back in October.
