Editor's Note:

The market's oversold bounce looks pretty tempting here. A lot of sectors are rebounding but I don't trust it, especially with tomorrow's FOMC meeting and Bernanke's press conference a potential landmine.

- James


NEW DIRECTIONAL CALL PLAYS

SPDR Gold ETF - GLD - close: 150.76 change: +0.73

Stop Loss: 147.40
Target(s): 155.00, 159.75
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market could be a little schizophrenic tomorrow. What I mean is that the market might be really quiet prior to the FOMC meeting and then get really volatile following Bernanke's press conference. There is a chance that Bernanke says something disappointing and stocks collapse again, which could fuel a flight-to-safety into gold. The GLD already has a bullish trend and this ETF hasn't violated its 50-dma in months.

I'm suggesting small bullish positions now with a stop loss under the 50-dma. Our first target is $155.00. As an alternative more conservative traders could wait for a rally past the early June high of $151.50 before initiating positions.

- Suggested SMALL Positions -

buy the July $150 call (GLD1116G150) current ask $2.64

- or -

buy the Aug. $150 call (GLD1120H155) current ask $2.08

Annotated Chart:

Entry on June 22 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 12.2 million
Listed on June 21, 2011