Call me a one trick pony, but shorting gold
is life. Pattern has been setting up similar to the pattern that preceded the NOV drop in GLD
. The dotted line I'm using as a quasi trigger alert, is a parallel (to wedge
resistance) line set to the max of the SEP rally high. The rest should be fairly self explanatory. If we cross below $106.20 I would initiate short, searching for full 3:1 profit. Feeling hesitant? Be mindful of possible structure support
at ~$104.00. Feeling bold
? Look for move to your 1.6 Fib level.
Lets talk implementation, more specifically options. I would move in by buying at the money puts, split 50-50 equal dollar value between late FEB and mid MAR expiration. If the move occurs hard and fast like it had in NOV you'll benefit from the leverage options offer, along with a significant boost to implied vol. and hence the price value of your puts.