SCT Issue #237
Gold is sliding yet again, down nearly $16 this morning, trading right now at the $1,080 level, after reaching as low as $1,072 at 10 pm EST last night.
Recall that in yesterday’s issue, I stated that “Short-term support lies at $1,098 and $1,086. If $1,086 is broken, we should see a move down to $1,072 … and if that gives way, to the $1,050 level.”
Well, $1,072 was hit right on the nose. Gold has since bounced a tad higher, but overall, remains weak.
Clearly, yesterday’s recommendation for subscribers who did not own existing positions in gold, was perfectly timed.
Assuming you are one of those subscribers, or a new one, you should have easily purchased the DB Gold Double Short ETN, symbol DZZ, at roughly $8.47 and the December 2015 GLD put options, strike price 105, symbol GLD151218P00105000, at roughly $4.85.
Make sure you have entered a protective sell stop, good-till-cancelled for your shares in DZZ at $6.43.
Note that I do not give stops on options as they are all too often picked off by other traders. However, if there is an adverse trend change in the underlying security, in this case gold, and you need to exit an option, I will never hesitate to tell you.
What we need to watch for today is a closing below $1,086. If gold can achieve that, then it should move even lower next week, perhaps breaking the very important weekly and monthly sell signals at $1,050.40 (basis the nearby August futures contract).
Hold all other positions and stay tuned. I may look to add an inverse, or bearish ETF on oil early next week.
Best wishes,
Larry
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