Today is a key day for gold. Trading down almost $6 at the $1,293 level, gold is now well below the $1,307.70 weekly buy signal. Yesterday’s crushing reversal in gold came right on time, and it would be tough for gold to recover that ground in one day, today.
Therefore, as long as gold remains below $1,307.70 by the close of trading today, the AI forecast remains on track and gold and other precious metals could get CRUSHED heading into the end of the month, probably on a failed Brexit vote.
So for now, hold all open metals-related positions and related stops. Unfortunately, the DUST calls expire today and there is no value that can be salvaged from them. Not to worry: Since I expect miners to fall, on average about 35% over the next two to three weeks before bottoming, I will look to recommend a new bearish mining position soon.
Right now, however, I have a new opportunity I would like you to seize. At roughly 4pm ET this afternoon, the June edition of my Real Wealth Report will be published online.
The main article this month is about China’s economy, and how Wall Street has gone brain dead on China, yet again. In fact, China today reminds me of where it was back in 2004, with most analysts panning the country, and yet its stock market soared over 400%.
Therefore, I see a great opportunity right now for a potentially very profitable trade in China. My recommendation is to purchase call options on the Deutsche X-trackers Harvest CSI300 China A-Shares ETF, an instrument that tracks China’s A shares, the equivalent of our blue chips, one might say.
Currently trading at $23.27, I see a move up to the $28 level quite feasible over the next couple of months.
Here are the details of the new trade:
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For ALL Members: Using 2.5 percent of your trading funds, buy the October 21, 2016 Deutsche X-trackers Harvest CSI300 China A-Shares ETF call options, strike price $24.00, symbol ASHR161021C00024000, at $1.20 or better, good till cancelled. Alternatively, if you are not trading options, using 5 percent of your trading funds, buy Deutsche X-trackers Harvest CSI300 China A-Shares ETF, symbol ASHR, at the market and place a good-till-cancelled protective sell stop at $20.50. |
Do not chase the market on the call option. If anything needs to be changed regarding the option order, I will let you know immediately.
Stay tuned and best wishes,
Larry
