Recap for the week ended July 22, 2016
Again, the market internals reversed themselves on Friday stocks were up only marginally at the open and pretty much worked their way to the highs near the close. The Dow was up approx .29%, with the S&P500 up .46% with the advances and declines 2:1 on all the major indexes.
The US$ index moved up about .50% for the week closing on the highs @ 97.35. This took a toll on the gold and again, we had no chance to short it as it hit the highs in the electronic session in the middle of the night.
As quoted from this yesterdays’ letter, “I expect that it will test $1,308 it may well test the bottom of the Bollinger Bands near 1,290-1295,” the Gold did in fact test the $1,308 level with a low of $1,310 before rallying all the way back to close up $11.90 at $1,331 and $21 off the lows. I’m still not sure that the move is over to the upside but I’d clearly like to get off a short or buy some GLD put around the $1345-1350 area using the same stop as noted in our earlier notes vs $129.29 on close only stop.”
The best option for this would be the 8/125.50 puts in the $1.55 area. Unfortunately even though these option had closed offered @$1.55, that gapped up at the open and never traded below $1.93. I’ll include a gold trade in the Sunday night letter.
As to the Oil, it broke the lows @ $44.55-44.53, bottoms for the last 3 days. If the US$ remains strong, both the oil and the gold should move lover. The only issue is that if the market declines the rush to US treasuries and gold could derail a decline. The oil may hold $43 and bounce, and although we have 2 long SCO positions in the $100,000 account even though we haven’t been able to trade it on these alerts. It is almost at my initial price objective of high $90s-$100. If it breaks to the upside I will just use a trailing stop to let it run…CAM
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