For the past week or so, I’ve been friendly gold, based on technicals only. Currently we are at our highs close to 1790. I suggested buying at the 1750 level b/c it was the trend line intersection yesterday. I think gold wants to go challenge its recent high. That flush down to 1168 spooked alot of weak longs out of the market.
Going home over the weekend, where are we as I write this?
Dec Dow futures have bounced back to the 12,144 level. There is a wall here between 12,144 and 12,228. I suspect we’ll continue to trade the recent crazy volatility. I find it hard to believe we won’t keep moving in this 650 point trading range which we’ve been stuck in for the past 3 weeks.
With the Dow up at the upper range of this trading range, it probably makes sense to buy some cheap puts.
I find it hard to believe that we won’t have some more panic over Europe in the near future.
Grains look range bound. The only trade I really like is buying SF against the low at 11.65/11.63.
Crude oil looks like its running out of steam the closer it gets to 100.00. Today’s high was the highest price since August 1st. 99.20 How to play it? Buy a cheap out of the money put. Look at a 88.88 as a down side target for March Crude. March has bounced 22 dollars in 6 weeks. 1/2 way back is 87.50. Buy a put for 3K down below the market. Its a double your money proposition if crude melts down lower.
That’s a bout it.
Have a great weekend.
CER