This morning the AUD gold price broke out to a new all-time high. (Currently trading 1832 per ounce.)
A round of applause, if you will.
Gold is back, bitchez.
Yesterday I outlined my thinking behind the inception of the ‘EG Five Arrows Trust‘, the main holding of which is GDX (NYSE:GDX) the Gold Miners ETF.
After looking at the GDX chart today, I realize I’m fairly late to the party. Still want to be long and still super-bullish on the PMs but my buy wasn’t exactly a great entry point. Note the annotations on the chart above.
Here’s what I intend to do:
Sell some GDX Aug 29 dollar calls against my long stock position (GDX160819C00029000) on the market open Wed July 06. This should mitigate against any short-term down-drafts in the SP.
Looking at some of yesterdays quotes I’m confident that I can get the calls away for somewhere in the 275c to 300c region (per contract). This should make the position easier to stick with as it buffers us against short-term volatility.
Contrary to popular opinion, I believe a good entry is everything
Looks like /CL is breaking down as well. Though about a position in SCO, but I’ll sit on the sidelines for now as I expect the negative correlation of Gold/Oil will hold up for a while, so we should get the benefit there, nevertheless.
With the futures red, looks like the Turtle is in for another rough ride.
Would have easily been filled during the morning session on my short GDX calls. Let’s be conservative and take an assumed fill @ 274c x 2 x 100 = 548 bucks (less commissions) back into the brokerage account.
–// Craig Amos
(1) Source: http://goldprice.org/gold-price-australia.html
NB: As stated in my earlier post, these are not live trades. This is an educational piece on how to actively manage a portfolio.