Gold dumps 100 bucks in 12 hours

Gold, the darling of the TV commercials and AM Radio end-of-times folks, spiked up to $1,923.00 yesterday. Today’s low is $1,816.00. That’s a 5% haircut in 12 hours.
I have been a reluctant long since $1,600 lows back in the middle of July.
I continue to buy way out of the money puts at the 1500 level every time we make a new high. They are cheap tickets that will eventually pay off 10 or 20 to 1.

If not, they are a hedge against the long position we have had since 1,600.
I have sell stops for the futures below 1704. If that level does not hold, at least we have locked ina worse case scenario of 100 dollar profit.
I bet a lot of folks who bought gold yesterday and lost 100 bucks in 12 hours wish they could say the same.

For a short term spec, buy the 1820 level right now. Look for a 20 dollar pop higher. The volatility DEMANDS you use stops to protect your self from your opinions.
This could turn on a dime, and you don’t want to be sitting wishing you had used better risk/reward when you entered the trade.

Dec Corn: Today I’d sell it at 767 1/2 and risk 5 cents. Its a technical level I like.

For SX, I like buying dips against a 1410 support. 1410 was resistance for 7 months. It should become support now. I am friendly beans on dips.

For WZ, I would wait for another 20 cent break before I buy it.
I am looking at KCZ calls which now are trading at 35. If you can buy em for 30cents , or 1500 a contract, I think its a good spec.

For the stock indexes, use this bounce to get positioned short in front of the President’s speech Thursday night. I believe the moment he opens his mouth, the markets will spike lower. It might not last for long. It might last for a while. But I want to be short before he speaks.
If the Republicans have a “response” speech, I’d want to be short in front of them as well.
Politicians are fades, no matter where they are on the political spectrum.

Good Trading.
Use your stops.

That’s all I have to say about that.
CER