For subscribers not keen on facing the sometimes considerable risks of trading gold futures, you can substitute this equity vehicle. For today, I’ll specifically recommend placing a ‘mechanical’ bid for 200 shares at 117.58, the midpoint Hidden Pivot, stop 117.10. If the trade goes well, take off half the position at 118.99, two cents shy of the 119.01 target. If you would prefer to use call options, I’d suggest focusing on the March 03 118 calls. They settled on Thursday at 1.16, but if GLD dips to the red line in the early going, I would expect them to be trading for around 0.78 – 0.88. Don’t pay up for them, since you’ll already be giving up edge by trading options, whose value decays over time, instead of stock. Decay tends to be particularly noticeable on Fridays, when longer-dated options come under pressure as the nearest ones expire. _______ UPDATE (Feb 20, 8:18 p.m. EST): The stock’s 117.62 low just missed our bid, so nothing should have been done on the orders. They can stand as given above. _______ UPDATE (Feb 21, 9:59 p.m.): GLD opened beneath the stop-loss I’d advised, so there was no trade. Cancel it if you haven’t already, but please note that the 119.01 target will remain valid as long as 116.15 isn’t exceeded to the downside. If the rally should surpass the target, the next stop would be 120.60. _______ UPDATE (Feb 22, 10:39 p.m.): GLD has been stabbing at p=118.38, but with no penetration so far. That midpoint pivot will need to give way for the 120.60 target to become an odds-on bet. Alternatively, a print below 116.60 would be signaling trouble. _______ UPDATE (Feb 27, 6:06 p.m.): That should be it for now, since the rally in the first half of this morning’s session peaked at 120.50, just 0.20 points from the target given above. If and when GLD turns and heads higher, our immediate target will be 121.69 (see inset, a new chart). You can buy a pullback ‘mechanically’ on a drop to 117.25, stop 115.77. _______ UPDATE (Mar 2, 8:56 p.m.): The pullback has now come down to the red line, but I am not recommending a mechanical bid there because I expect GLD to retrace further before it finds traction. A green-line bid may be warranted, but let’s see first whether sellers inflict more damage.
