Today's missive is going to be brief as there are no need for words when
you have the chart below indicating every major low in gold was accompanied
by an RSI reading below 30. GLD (the physical gold ETF) is sporting a 27.46
RSI this morning and while we have seen readings lower than this at other
bottoming periods, it is time to open a 25% position in the GLD July $120
calls at $1.40, where I was filled shortly after the New York opening. I am
now attempting to add a second 25% tranche at $1.50 with the current market
$1.54.
Silver is also finding support in the $16.20-16.30 range where I
successfully built a position back in March when I was able to accumulate a
large position in the SLV June $15 calls in the $0.50 range. Within days,
silver screamed back above $17 and the SLV was in the mid $16s where profits
were taken. We are once again close to the accumulation zone for silver but
based upon RSI, gold is the buy.
Charts courtesy of Michael Ballanger.
Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of
the data provided. Nothing contained herein is intended or shall be deemed to
be investment advice, implied or otherwise. This letter represents my views
and replicates trades that I am making but nothing more than that. Always
consult your registered advisor to assist you with your investments. I accept
no liability for any loss arising from the use of the data contained on this
letter. Options and junior mining stocks contain a high level of risk that
may result in the loss of part or all invested capital and therefore are
suitable for experienced and professional investors and traders only. One
should be familiar with the risks involved in junior mining and options
trading and we recommend consulting a financial adviser if you feel you do
not understand the risks involved.
