0. Okay so follow along on this one, I will make it quick;
1. Last time GLD corrected, it was around the $145 Level;
2. It was September 4/6 2019, and it went from $145 to $140 in a matter of like 2 hours (just memory, I was short that day);
3. It rebounded off the $140 support level ;
4. PUT options on the $140 are dirt cheap, and GLD owners see that as support.
5. March 20 2020 $140 PUT - $38 cents a contract- so you can go 1000 shares short for $380 + fees.
6. GLD should SPIKE on January 23rd 2020. This corresponds to the Intel ( INTC ) earnings release;
7. Many believe that INTC may tank the market, as it kicked off the 2000 crash in March;
8. Algorithms are primed to either take this market to 3850, or to 3100 based on earnings ;
cnbc.com/2020/01/17/earnings...
9. GLD people will load the boat on the 23rd and create a blow-off top;
0. At 3:45pm you will buy GLD March 20th 2020 $140 PUT for < $30c a contract. Throw $300 at it. If you want to take a larger position, you will need a UVXY hedge to counter this unless you are okay losing the premium. But remember you have 60 days for the New Bull Market to take hold, and the Gold Hedge to Unwind. That should be plenty of time. So just buy enough UVXY to cover the $X you spend on GLD Puts. So if you spend $10K on GLD puts, you need to hedge 10K against a meltdown. You use the UVXY to do this. VXX may not be the best hedge right now, UVXY is better (can't explain right now - no time - inefficiencies in the VIX ). If the market corrects, UVXY goes from $10 to $30 in about 2 minutes. So a $1000 purchase of UVXY would be $3000. Anyway, you need a married put or call spread to do this. This is the perfect straddle. So you would also on the 23rd of January buy a married put on the UVXY . So you buy the January 31st UVXY $10.50 put for 50c or whatever, and that give you a week with total protection, against INTC and AMD . All crashes up the 31st of January will only cost you about $500 US for 1000 shares of UVXY for a week. If the market crashes you make $20000 US in about 2 minutes when UVXY spikes to $30, and that is okay, as your $500 puts are worthless, but the stock has a delta of 1.0 so whatever you sell it at, minus $500 is your profit.
1. If you do this, you need to carefully watch the market next week.
2. If INTC raises guidance or beats, or whatever happens and the stock actually goes up on a tear, then GLD is really finished. Gold would probably be around $120 by the end of March and you will be $20K richer, for just a $300 risk/reward.
3. I don't know about you, but this is a nice setup.
4. I also don't think there will be any stops along the way.
5. You need options to do this;
6. So. You can buy all the semiconductors CALLS on the March 20 Strike you like and ALL the GLD PUTS on the March 20 $140 Strike, and just hedge the whole thing over earnings for about $500 bucks. Then you know the direction, and you run with it baby!
7. If you haven't been following my AMD thread, you have really missed out. Been trading it personally and we manage an investment trust on AMD as well. We are long from ~$28 and shares will have to be pried from our cold, dead, hands...
- The AMD Whisperer
1. Last time GLD corrected, it was around the $145 Level;
2. It was September 4/6 2019, and it went from $145 to $140 in a matter of like 2 hours (just memory, I was short that day);
3. It rebounded off the $140 support level ;
4. PUT options on the $140 are dirt cheap, and GLD owners see that as support.
5. March 20 2020 $140 PUT - $38 cents a contract- so you can go 1000 shares short for $380 + fees.
6. GLD should SPIKE on January 23rd 2020. This corresponds to the Intel ( INTC ) earnings release;
7. Many believe that INTC may tank the market, as it kicked off the 2000 crash in March;
8. Algorithms are primed to either take this market to 3850, or to 3100 based on earnings ;
cnbc.com/2020/01/17/earnings...
9. GLD people will load the boat on the 23rd and create a blow-off top;
0. At 3:45pm you will buy GLD March 20th 2020 $140 PUT for < $30c a contract. Throw $300 at it. If you want to take a larger position, you will need a UVXY hedge to counter this unless you are okay losing the premium. But remember you have 60 days for the New Bull Market to take hold, and the Gold Hedge to Unwind. That should be plenty of time. So just buy enough UVXY to cover the $X you spend on GLD Puts. So if you spend $10K on GLD puts, you need to hedge 10K against a meltdown. You use the UVXY to do this. VXX may not be the best hedge right now, UVXY is better (can't explain right now - no time - inefficiencies in the VIX ). If the market corrects, UVXY goes from $10 to $30 in about 2 minutes. So a $1000 purchase of UVXY would be $3000. Anyway, you need a married put or call spread to do this. This is the perfect straddle. So you would also on the 23rd of January buy a married put on the UVXY . So you buy the January 31st UVXY $10.50 put for 50c or whatever, and that give you a week with total protection, against INTC and AMD . All crashes up the 31st of January will only cost you about $500 US for 1000 shares of UVXY for a week. If the market crashes you make $20000 US in about 2 minutes when UVXY spikes to $30, and that is okay, as your $500 puts are worthless, but the stock has a delta of 1.0 so whatever you sell it at, minus $500 is your profit.
1. If you do this, you need to carefully watch the market next week.
2. If INTC raises guidance or beats, or whatever happens and the stock actually goes up on a tear, then GLD is really finished. Gold would probably be around $120 by the end of March and you will be $20K richer, for just a $300 risk/reward.
3. I don't know about you, but this is a nice setup.
4. I also don't think there will be any stops along the way.
5. You need options to do this;
6. So. You can buy all the semiconductors CALLS on the March 20 Strike you like and ALL the GLD PUTS on the March 20 $140 Strike, and just hedge the whole thing over earnings for about $500 bucks. Then you know the direction, and you run with it baby!
7. If you haven't been following my AMD thread, you have really missed out. Been trading it personally and we manage an investment trust on AMD as well. We are long from ~$28 and shares will have to be pried from our cold, dead, hands...
- The AMD Whisperer
Note
Also, the first GLD selloff, corresponds to when one of my algorithms picked up the change in market movements. Then is when we went from a June 2018 Bear Market to a Bull Market. Algorithms identified it, and that is why gold sold off that day. People just kept buying gold, as the masses are waiting for the crash, and they believe Gold will save them. Gold doesn't always do well in a crash. If we Crash, Gold may Crash too. Not a good hedge. Just a momentum product through a Bear Market. GLD will die soon. Promise.Note
Now keep in mind that gold can continue to go up. Here is why, including equities of course:(Morgan Stanley)
And yet, as he’s quick to point out, "with $1.2 trillion in annualized balance sheet expansion from the Fed, ECB and BoJ ongoing, we think stocks will have a difficult time selling off much and think any correction in the S&P will be limited to 5% or less."
Rejoice, dip-buyers!
With that in mind, I'll leave you with a good passage from a note Cecchini published over at Ben Hunt’s Epsilon Theory back in November - I imagine readers here will sympathize with him, even as you revel in your gains:
The distortions QE has created (especially where QE produced negative rates) will be difficult to unwind. It is important to remember that the balance sheet expansion needed to execute on QE policies ultimately works through the suppression of term or risk premia. It is not through a quantity of money mechanism. Little firepower is left in most of the developed world for QE to have more impact, and we conclude more harm than good has already been done through negative rates policy. Overall, there are few levers left for central banks short of moving to purchases of equities (as in Japan). That leaves fiscal policy, which is notoriously inefficient and has empirically disappointed as a stimulant to growth when compared to good old fashioned productivity gains. These gains are harder to achieve when low rates keep zombie companies afloat. The seeds of aggressive rates policy and negative rates were sown in the late 1990s, and they have sprung into large dogmatic trees, which should soon be cut down.
So due to distortions, we simply can't go down. But, if the equity rally really has legs, I mean really has legs and continues nicely into February, and farther, it will be hard to HOLD GOLD, unless it manages to go nuts and head to $2000 an ounce. If equities, as Morgan Stanley says go up 20% this year, do you think Gold continues after a 50% run, and the end of recession fears. You time the change in perception, you time the market...
Note
UPDATE - WE ARE ADDING TO OUR GLD SHORT HERE. Getting flow feedback at these heights, that we don't like... $146.65Note
We will get stopped at $148.50.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.