Gold Pulls Back To A Critical MA And Bounces Presenting Opportunities.
MY ANALYSIS
Fundamentally, GOLD took a hit on the Goldman Sachs news and in my view this presents a terrific opportunity. The Regulators won’t even put a chink in Goldman’s armour; Goldman Sachs makes the rules in the markets, not the Regulators. Paulson & Co. have not been charged in this fraud and probaly won’t be. So there may be some more selling early in the coming week, but in the long run I expect GOLD PRICES to continue up the slope.
Technically, GOLD is slightly over-bought as indicated by the MFI. However, this market is still in an STRONG UPWARD trend on the daily indicated by the 2 MA’s pointing higher. It pulled back to a critical MA and bounced presenting a CLASSIC OPPORTUNITY to buy calls.
BUYING OPTIONS ON FUTURES=STAYING POWER IN TRADE
OPTIONS PLAY
BUY AUGUST BULL CALL SPREADS (over 100 days until expiry)
We also buy in a 3 to1 ratio an outright PUT in case the market makes a MAJOR move against us.
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Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions
FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION’S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE’S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION.