Gold is the potential problem child among my holdings this morning. The metal gapped up in the futures pits, and that is reflected by a rise in GLD, the etf that is my vehicle for selling the metal short.
My short entry into GLD used bb/mfi method, and even with the rise, GLD remains in a bearish position. The price is still below the top band, and the mfi is reversing toward an exit from overbought territory. So I shall continue to hold the bear call options spread (short the DEC 110, long the DEC 111 calls).
UNG, my other holding, is up this morning and approaching 9.30. With the covered call hedge, opened with the underlying shares at 8.96, the position remains profitable. I have, however, given up potential profits on the shares as a result of the hedge.
The indicators (pps/mfi analysis):
Bear mode: SPY (blue chips), TLT (Treasury long bonds), EUR/USD (Dollars per Euro)
Bull mode: GLD (gold), VIX (fear index, bullish is bearish for stocks), USD/JPY (Yen per Dollar)
The price action on the currencies doesn't match the technical indicator.
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