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The outage at our email service provider that prevented us from sending the Trade Alert to buy the VanEck Vectors Gold Miners ETF (GDX) December 23 put last Wednesday afternoon cost us as the underlying ETF GDX gapped down overnight, which increased the entry cost when we were finally able to send out the Trade Alert last Thursday morning.
Nevertheless, during early trading today this position was still sitting on a moderate paper gain, but gold and gold miner shares rallied in the afternoon in reaction to the release of the Fed minutes, which showed that while Fed officials generally felt that raising interest rates was appropriate if the economy continued to grow, the policymakers agreed that they should wait until they see evidence that a recent economic slowdown was temporary.
The minutes, however, in our opinion really didn’t reveal anything new, and today’s gold rally could prove to be just one-day noise. Our gold and gold stocks indicators both continue to be in bearish territory, and we are comfortable keeping the trade open. Today’s closing bid for the option was $2.22. Our entry price was $2.36. One bad day for GDX and this trade could be firmly in the green.
That said, we aren’t wedded to the position. We will continue to closely monitor how our indicator signals change and will act accordingly.
Our stock indicator has been the most improved indicator over the past week or two. In neutral territory, our stock indicator expects, based on the many market variables that it analyzes, the market to essentially tread water in the near term.
Our oil and oil stocks indicators have both also trended toward neutral. The underlying signals for both really lie in the middle ground between what we’d call “-1” and “0,” but since they have been moving toward neutral, we will call them “0,” but with a slight bearish inclination.
Our bond indicator signal has been moving around more than our other indicators. It’s now at “+1,” and could soon become stark enough for us to open a new long position on bonds. The dollar is also at “+1,” but it has retreated some over the past week.
We will have more trades coming up soon. Stay tuned.
Until Next Time,
Your Aggressive Trader Team