THE WEEK AHEAD: GPS; SLV, GDX/GDXJ, XOP, IWM/RUTEARNINGS:
GPS (37/82/17.0%) is really the only earnings announcement that interests me from a volatility contraction perspective. Pictured here is a September 18th skinny short strangle, which was paying 2.03 as of Friday close.
EXCHANGE-TRADED FUNDS SCREENED FOR IMPLIED >35% AND WHERE THE OCTOBER AT-THE-MONEY SHORT STRADDLE IS PAYING >10% OF STOCK PRICE:
SLV (50/61/17.4%)
GDX (22/47/14.1%)
XLE (21/37/11.6%)
GDXJ (19/55/16.7%)
EWZ (18/45/13.2%)
XOP (14/49/14.0%)
Juice as a function of stock price resides in SLV (17.4%), followed by GDXJ (16.7%), GDX (14.1%), and XOP (14.0%).
BROAD MARKET:
QQQ (23/28/8.2%)
IWM (23/29/8.4%)
EFA (17/21/5.6%)
SPY (16/22/5.8%)
IWM/RUT is where the premium is, relatively speaking, followed by the QQQ's.
DIVIDEND YIELDERS:
XLU (18/22/6.8%)
EWA (18/22/7.8%)
EWZ (18/45/13.2%)
IYR (17/22/6.9%)
EFA (16/22/5.6%)
SPY (16/22/5.8%)
HYG (15/13/3.3%)
TLT (14/16/4.6%)
EMB (11/10/2.8%)
Brazil ... again?!
GDXJ
OPENING: GDXJ SEPTEMBER 18TH 48/70 SHORT STRANGLE... for a 1.92 credit.
Notes: High 30-day implied here at 60.5. Going with a directionally neutral camped out at the 17 delta's. Hopefully, less of a roller coaster this go 'round.
Miners bull trend resumes.After this week I´m convinced we have seen the bottom in gold stocks.
From here on, prices will go up and retrace, but making higher lows.
I think we´ll probably face two phases.
1) From here to the end of August, GDXJ will go up and retrace a few times until they surpass the previous high. I expect GDXJ 61-62$ Tuesday - Wednesday.
(63$ or more would need gold to reach almost previous high). Keep an eye close. After this top, a retracement back to 58-59$ for next week, and up again.
I´ll pay attention that price don't fall the big channel. I seriously would be surprise if it does. The trend to the upside is very strong.
2) After that, prices should flow alike June, until the end of September, inside a tiny channel. From the 21th of September on, I should pay special attention, because i believe prices would begin to behave "toppy", like past two weeks. Gaps up, and drops, new highs also, and the last week of September or the first of October the Top.
I expect GDXJ around 90 $ (86 to 96) in those dates.
And Gold around 2.300 also at the end of September.
It's early, but this is a possible road map following previous patterns. I'm totally convince in a bullish scenario, after August (for example). If it fit this one it would be just coincidence.
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If prices fall from the channel, a bearish scenario. I don't believe it would happen, but Mr. Market doesn't care what I believe.
And after that....well, If we reach the 90s...the we could correct and come back to the 60s. It happened before. But that is another tale, and we are far from there.
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Have a nice week and good luck.
KGC- Gold/Silver mining play (Industry)As usual, demand for Gold mining stocks has risen with the ore rally. Mining stock such as KGC has outperformed major gold/silver mining ETFs and completely obliterated gold/silver ETFS since March.
It is a higher risk and higher reward play for investors who want to ride the gold/silver trend.
EV/EBITDA TTM, Price/cash flow TTM and many other valuation ratio indicate that KGC are undervalued compared to its peers.
The case for QUAD-digit silverIs it so difficult to imagine silver going 10x over the next 3-4 years? That would put the price over 290 per oz. What about a 30-40x move to over 1000 per oz? I can make an easy case for triple & quadruple digit silver over the next decade just by looking at the silver : M2 money supply. The creation of our currency = inflation. While this inflation (expansion) tends to go into financial assets first, it will catch up with the real economy in time. I believe deflation is temporary and the lag that we're witnessing is similar to the count down before a rocket takes off. Take a look at the Federal Reserve's balance sheet. We have a problem and it's going to catch up with us quickly. Look at the chart below of SILVER:M2 to understand where silver price is in relation to M2 money supply and how historically cheap silver actually still is..
THE WEEK AHEAD: NVDA, BABA EARNINGS; SLV, GDXJEARNINGS:
NVDA (31/53/12.2%), announces Wednesday after market close.
WMT (29/33/7.0%), announces Tuesday before market open.
TGT (28/37/8.3%), announces Wednesday before market open.
HD (19/35/7.2%), announces Tuesday before market open.
BABA (43/45/10.5%), announces Thursday before market open.
Pictured here is an NVDA September 18th 400/410/540/550 iron condor, paying 3.28 at the mid price as of Friday close, with the short option aspects camped out around the 19 delta -- very nearly one-third the width of the wings, but off hours pricing is showing wide here, so I'll have to recheck that setup for pricing during the New York session and more toward earnings, since the underlying is likely to move between now and then.
Narrower Winged Alternative: September 18th 405/410/540/545 iron condor, paying 1.68.
Although WMT, TGT, and HD also announce, you can see that they aren't paying a ton relative to their stock price, with the short straddle price paying 10% relative to the stock price kind of being my cut-off.
Potential BABA trades:
September 18th 220/230/285/295, paying 3.08.
September 18th 225/230/285/290, paying 1.67.
EXCHANGE-TRADED FUNDS (SCREENED FOR >35% 30-DAY IMPLIED AND FOR THE AT-THE-MONEY SHORT STRADDLE PAYING >10% OF THE STOCK PRICE):
SLV (57/69/15.8%)
GDX (20/46/11.0%)
GDXJ (20/53/13.1%)
XOP (10/46/10.8%)
The most bang for your buying power effect dollar: SLV, where the September 18th 21/31 short strangle is paying nearly a buck (.98 at the mid price as of Friday close). Here, however, I'll probably lay off adding more September, since there's only 33 days left. And the October cycle is a bit longer than I'd like -- 61 days.
BROAD MARKET:
IWM (23/30/6.4%)
QQQ (23/28/6.3%)
EFA (16/19/4.3%)
SPY (15/21/4.5%)
Mighty thin at the moment, but it's been thinner.
Here's what the 16 delta short strangles are paying in each* in the September cycle:
IWM September 18th 142/169, 2.22 (1.4% relative to stock price)
QQQ September 18th 247/291, 3.96 (1.4% relative to stock price)
SPY September 18th 311/352, 3.80 (1.1% relative to stock price)
* -- EFA strikes aren't granular enough from a delta standpoint to price out a clean 16-delta short strangle.
IRA DIVVY-GENERATORS:
IYR (19/24/5.5%)
EWA (18/26/6.0%)
EWZ (17/43/9.9%)
HYG (17/14/2.6%)
EFA (16/19/4.3%)
XLU (16/20/4.8%)
SPY (15/22/4.5%)
TLT (14/17/3.6%)
EMB (9/9/2.0%)
EWZ (Current Yield 3.35%) still has some juice in it, followed by EWA (Yield 3.55%), and IYR (3.24%). In all likelihood, that first quarter volatility spoiled me for the year ... .
Could Gold be headed for a double top? Gold could form a double top like it did in early March before heading lower and hit the .618 Fib target of low 1700.
This is a short term move so you could play this with GLD Aug 28th calls with: Stop at GLD below 178.5.
First Target 190 (gap fill)
Second Target 194.5 (double top)
If that plays out, the next move down would be even bigger! It would then be followed by a very bullish trend for gold even bigger again and for the longer term!
Miners could also be an option for this play but in March, although Miners did go up, they did not rise to their February top (see blue line). So I prefer GLD for this setup.
Disclaimer: The above is not an investment advice. It is merely an opinion and I share it for your entertainment only. Do your own due diligence and above all, trade safely and stay safe!
The gold reset we've been waiting forAgain, I am very bullish for gold long-term but things were getting crazy. Too much distance between price and mean, too over-bought, and (of course) the parabolic shape GLD and SLV began taking. Today is not a suprise and I expect the bleeding to continue. An amazing buying opportunity awaits us but we will need to be patient!!
Follow the smart money! 1. Bonds are showing a very similar up trend pattern as in the early 2020 (black line)
See what happened next in late February and early March. As soon as the market started its descent, bonds shut way up !
2. The dollar appears to want to bottom. Where did it go when bonds shut up? (Orange line). There was a small lag but DXY went way up to the roof!
3. What does it mean for Gold (cyan line) & miners? As the dollar shoots up, Gold, priced in USD, will correct like they did then. Target is hard to establish at this point but a significant pull back is expected. I will update when I am out of this trade.
4. Conclusion, as soon as the over valued stock market shows signs of weakness, bonds will shoot up, the dollar will follow and gold & miners will correct significantly. As they also did in 2008 (not shown in this chart) before taking off!
Please note this is a short term view (30 to 60 days). I am bullish on gold and miners long term. However, a great entry price should come soon. Why not profit before then?
Disclaimer: The above is not an investment advice. It is merely an opinion and I share it for your entertainment only. Do your own due diligence and above all, trade safely and stay safe!
A Short Term bearish view for the MinersWe have been behaving in a top - mode, and the trend channel from June has been broken last Friday to the downside. If things unfold in a similar way to last August 2019 we could have some correction this week, maybe followed with some upside to make a king of a double top at the 66 level and then more correction...
I would pay attention to the 63 $ level, because there is a gap there. Gold could rise on Monday, so miners do fill the gap and then the fall can continue for the rest of the week. The possible downside target, could be 55-56$ (gold should fall around 1.850 $ during this week). It looks so far...but we've been there a few minutes ago in terms of gold history.
58$ is also important level.
Have a nice week and good luck.
Widen Your GazeProviding an update to our previous trade setup for Gold that outlined a potential Bearish Head and Shoulders setting off a fractal chain reaction of selling pressure. That scenario has played out as we predicted and we expect selling pressure to remain intact for the near term. We expect the bearish momentum to continue until we reach previous highs around the 1920's.
Never trade a pattern before it has completed and aways hedge your positions as appropriate.
THE WEEK AHEAD: LYFT, UAL, MGM, DAL, CNX, SLV, GDXJEARNINGS:
LYFT (20/82/19.8%) announces earnings on Wednesday after the close, so look to put on a play in the waning hours of Wednesday's New York session if you want to play the volatility contraction.
Pictured here is a directionally neutral 29/38 short strangle camped out at the 20 delta in the September monthly. Paying 1.26 as of Friday close, it has 27.74/39.26 break evens, which are wide of 2 times the expected move on the call side, but somewhat short of 2 times on the put side due to skew; delta/theta .25/3.58.
You'll have to go somewhat tighter (the 25 delta) to get one-third the width out of an iron condor, with the 27/30/37/40 iron condor paying .97; 29.03/37.97 break evens, which are at the expected move on both sides; delta/theta 2/1.31.
I've stuck on an UBER line just to show how LYFT's competitor did with its earnings in the coronavirus environment ... .
CSCO (28/36/8.4%) also announces, but has less than ideal metrics for a volatility contraction play.
EARNINGS AFTERGLOW:
There are a number of underlyings with earnings in the rear view that still have sufficient implied to potentially make them worthwhile just as pure premium selling plays. Here are a number of them, ranked by the percentage that the September at-the-money short straddle is paying relative to stock price and screened for those paying greater than 15%:
UAL: 20.8%
MGM: 17.7%
DAL: 17.7%
CNX: 17.6%
WYNN: 16.9%
PINS: 16.1%
ROKU: 16.0%
BYND: 15.8%
SNAP: 15.7%
BA: 15.3%
SQ: 15.2%
AMD: 15.1%
LUV: 15.1%
I may pick one or more of these if I have nothing better to do, keeping in mind correlations here (i.e., UAL, DAL, and LUV are all airlines; BA is airline-related).
EXCHANGE-TRADED FUNDS, RANKED BY SEPTEMBER AT-THE-MONEY SHORT STRADDLE PRICE/STOCK PRICE RATIO AND SCREENED FOR >35% 30-DAY IMPLIED:
SLV (70/81/19.9%)
GDXJ (24/62/15.6%)
GDX (24/43/12.8%)
XOP (11/48/12.7%)
EWZ (18/43/11.2%)
Here, I've screened out those paying <10%. I'm in an August GDXJ play, but may re-up with a SLV, even though there is going to be some correlation with miners. The September 18th 20 delta 22/36 short strangle was paying 1.45 as of Friday close, with the 25 delta 20/23/33.5/36 iron condor paying .99. There is some massive call side skew to potentially accommodate here, so could see going "double double" (double the contracts on the put side, but double the width on the call).
Two Examples: September 18th 2 x 18/2 x 20.5/33/38 "double double" iron condor, paying .98 or September 18th 2 x 15.5/2 x 25.5/33.5/44 "double double", paying 1.30, the latter of which approaches the metrics of the naked short strangle.
BROAD MARKET EXCHANGE-TRADED FUNDS:
Most of the fun has bled out ... :
IWM (25/30/7.3%)
QQQ (25/28/7.2%)
EFA (17/21/4.8%)
SPY (15/22/5.1%)
GOLD REVERSAL WITH FRACTAL H&SHere is a multi-timeframe fractal analysis for Gold priced in USD. Looks can be deceiving but it appears a head and shoulders pattern has formed signaling a short term price reversal in the yellow metal. This pattern has potential to set off a chain reaction of bearish chart patterns and downward price movement. Use stop loss as appropriate as these are irrational markets and volitility could spike at any moment.
To validate, looking at the DXY, the chart seems to show the opposite with a double bottom reversal pattern beginning bullish series of movements.
Good Luck Traders!
The trend The channel from June is doing its work and everything continue bullish. The gold sector and the miners.
So around the 10th of August we can meet a new top in the channel, that can also be an important top, because the possibility of a touching the top line of a major channel.
But, all of this is just to be cautious. Gold and miners would do what they want.
GDXJ/GOLD Ratio could be around 0,034, that would mean Gold should reach a target somewhere between 2.050 - 2.100 That would fit the sector.
One thing follows the other.
One of the most difficult thing is to follow a sharp trend like the one we are since June. It´s hard because you don't have to no "nothing". If you are an investor, its easy, because that's your attitude, but if you are a trader you look for retracements or even worse, for reversals, tops, and so, and finally you chase the trend. That was my case and a lesson to learn. That's why it is said that buy and holders most of the times do better that traders.
I´m full long since Friday.
But this is so crazy that maybe on Monday I´m regretful....Mean while....relax and enjoy the summer
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𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗠𝗼𝗻𝘁𝗵: $GDX Monthly. What a Move! Major breakout! Look to buy dip as sentiment too high 📈
$GLD $GC_F $GDXJ $SI_F $SLV $ES_F $SPX $VIX $NQ_F $QQQ $NDX $SOX $IWM $TLT $TNX $DXY #Gold
Gold Likely to Digest Gains HereThis is the August (front month) contract in #Gold Futures. A big move is coming as gold is testing the top end of this rising channel for 4th time since July 27th. Technicals favor consolidation in short term down to rising support, setting up new highs after $GLD $GDX $GDXJ
THE WEEK AHEAD: BYND, ROKU, SQ, ETSY, UBER EARNINGS; GDXJ, SLVEARNINGS:
There's a bunch, but here are the ones that interest me most for volatility contraction plays:
BYND (46/87/17.2%)*, announcing Tuesday after market close.
ROKU (40/84/16.6%), announcing Wednesday after market close.
SQ (40/74/13.4%), announcing Wednesday after market close.
ETSY (38/74/14.8%), announcing Wednesday after market close.
UBER (15/73/11.9%), announcing Thursday after market close.
Pictured here is a directionally neutral iron condor in BYND in the September cycle with the shorts camped out at the 21 delta strikes. A 3.26 credit as of Friday's close, it's paying nearly one-third the width of the wings. Naturally, you can go with the August monthly, but this is one that's known to be a mover, so I'd opt to go longer duration for more room to be wrong. For those who prefer naked: the September 18th 106/165 was paying 8.55 at the mid price as of Friday's close, with the August 21st 105/160 (18 delta) paying 5.45.
EXCHANGE-TRADED FUNDS WITH 30-DAY >35%, ORDERED BY RANK, AND SHOWING SEPTEMBER SHORT STRADDLE PRICE AS A PERCENTAGE OF STOCK PRICE:
SLV (46/58/15.0%)
XLE (26/40/11.5%)
GDXJ (22/57/16.0%)
GDX (22/46/13.0%)
EWZ (20/46/12.4%)
XOP (13/53/14.6%)
From a buck banging perspective, it's GDXJ (16.0%), followed by SLV (15.0%), and XOP (14.6%) for premium selling. I've already got GDXJ and SLV plays on, so may consider something in XOP if I'm desperate to add to my theta pile.
BROAD MARKET:
IWM (29/34/9.1%)
QQQ (22/27/7.5%
EFA (21/23/6.0%)
SPY (19/23/6.2%)
The volatility was nice ... while it lasted. I may switch over to IWM put selling in the IRA in lieu of SPY given that RUT is where the volatility is at relative to the others. The 16 delta strike nearest 45 days until expiry would be the September 18th 130, paying 2.05.
IRA DIVIDEND-GENERATORS:
XLU (23/20/5.6%) (3.19% yield)
IYR (22/28/7.2%) (3.27% yield)
EWA (22/30/8.4%) (3.72% yield)
EWZ (20/46/12.4%) (3.17% yield)
SPY (19/23/6.2%) (1.75% yield)
TLT (17/17/4.3%) (1.64% yield)
HYG (15/15/3.0%) (5.00% yield)
EMB (11/11/2.9%) (4.22% yield)
EWZ (12.4%), followed by EWA (8.4%), then IYR (7.2%). Getting kind of tired of laddering out EWZ, but you go where the volatility's at.
* -- For earnings, the August 21st at the money short straddle is used for determining the short straddle/stock price percentage; for everything else, I'm using September.
GOLD ascending triangle$gld $gdx $nugt $dust $jdst $jnug $gdxj $slv $sil
I'm bullish on gold no matter what technical patterns are at play. This is an interesting pattern I've not spotted until the last few months. Looks like a legitimate ascending triangle and measured breakout. Will it break above and never look back or will it correct and land on top to test the triangle? Doesn't matter to me. Either you hold it or you don't.
THE WEEK AHEAD: AMD, BA EARNINGS; GDXJ, XOP, SLV PREMIUM SELLINGEARNINGS:
-- PROBABLY PLAYING:
AMD (38/71/15.4%) announces on Tuesday after market close.
BA (25/71/15.1%) announces Wednesday before market open.
Pictured here is an AMD August 21st delta neutral 60/85 short strangle paying 2.93 as of Friday close.
The BA August 21st 150/210 was paying 7.23 at the mid.
Naturally, strikes may need adjustment running into earnings, depending on how prices move in the early part of the week. If of a defined risk bent, look to sell iron condors with break evens wide of the expected move* and that pay greater than one-third the width of the wings. Examples: AMD August 21st 57.5/62.5/80/85, paying 1.99 (a little more aggressive delta-wise than I would usually go, but you've got 5-wides to deal with on the call side, at least as of the writing of this post); BA August 21st 140/150/200/210, paying 3.30 (but prices showing wide in the off hours).
-- WATCHING FOR POTENTIAL RAMP-UP IN IMPLIED:
EBAY (40/46), Tuesday after market close.
SBXUX (22/28), Tuesday after market close.
QCOM (27/46), Wednesday after market close.
PYPL (43/52), Wednesday after market close.
FB (37/46), Wednesday after market close.
AAPL (24/39), Thursday after market close.
GOOG (36/38), Thursday after market close.
XOP (27/43), Frida before market open.
EXCHANGE-TRADED FUNDS ORDERED BY RANK AND SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
SLV (43/54/14.3%)
XLE (27/42/12.5%)
GDXJ (21/56/16.2%)
EWZ (21/48/13.4%)
GDX (18/43/12.8%)
XOP (14/54/15.8%
GDXJ, XOP, and SLV appear to paying the most relative to stock price.
BROAD MARKET ORDERED BY RANK AND SCREENED FOR AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
IWM, SPY, QQQ, and EFA are all paying <10% of the stock price.
IRA DIVIDEND-PAYERS SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
EWZ (21/48/13.4%)
* -- Expected move is generally 85% of what the short straddle price is paying. For example, the BA July 31st 175 short straddle was paying 13.15 as of Friday close. 85% of that is 11.18, so options are pricing in a +/- $11.18 move through Friday's expiry which would's BA's expected move between 162.58 and 184.94.
How will it play outGold price action in 2007-2008 shows how the 1980 all time high was broken.
I've compressed the time scale, cause, lets face it, things are happening faster these days.
I'll be looking for a wedge pattern...
silver closer to the floor than the ceilingThe silver to gold ratio is telling a story worth listening to. It seems to be telling us that silver is still incredibly cheap compared to gold and is closer to the floor than the ceiling in terms of value when compared to gold.
