Gold has reached a level where I would rather sell it than buy dips. Despite the garbage going on in the Mid-east, (and there will always be something teetering on disaster in the mid-east, it seems) I think at the very least I’d take profits on some longs and raise the trailing sell stops. A settlement above 1426 opens up the door to 14.50 and then the may high at 1490.
The trend looks decent and I could see that happening. Make sure you raise your sell stops and sit tight. It might help to turn off the TV so you don’t get too bullish as we see more and more bad news across the world stage.
CER
I’m a poor slub that only has the 401K options my company gives me. All stocks, all bonds, half stocks/half bonds, or Fixed income (which I assume is T-bills or some such). What is the safest place to ride out a 20% correction?
If you believe there will be a correction in the stock market, first look at what that means. You’d be looking at a 3100 pt sell off from the recent record high posted on August 2nd. 20% of 15,522. 3104 to be exact brings us to 12,418. You could buy a December Dow 12,500 put for approximately 540 dollars today. You’d never ever be in a position where you could lose more than the price of that option, and if you are correct in your fear of a 20% correction, that option could gain 5 to 10 times its current value, depending on the timing of the correction. For the next 106 days, however, you would have an “insurance policy” against the value of your long stock portfolio. Hope that helps. This is a strategy I could implement for you if you were a client. Best
CER