NEW DIRECTIONAL CALL PLAYS

SPDR Gold Shares - GLD - close: 167.38 change: +0.04

Stop Loss: 163.40
Target(s): 182.50
Current Option Gain/Loss: + 0.0%
Time Frame: 8 to 10 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
After all the hype over last week's EU summit it looks like the mess in Europe is going to get worse before it gets better. That means the euro is likely to plunge against the dollar. Normally a stronger dollar is bearish for gold prices. In this instance I see gold climbing as well. The dollar is going to be rising as a safe haven trade because investors are worried about Europe. The same can be said for gold.

The GLD spiked down to $163.61 and then rallied back to unchanged on the session. I am suggesting we buy this bounce and launch small bullish positions tomorrow. We'll use a stop loss under today's low. Our multi-week target is $182.50.

- Suggested Positions - (Small Positions)

buy the 2012 Jan $175 call (GLD1221A175) current ask $5.45

Annotated Chart:

Entry on November 2 at $---.--
Earnings Date --/--/--
Average Daily Volume = 15.3 million
Listed on November 1, 2011


SPDR S&P 500 ETF - SPY - close: 122.00 change: -3.50

Stop Loss: 118.40
Target(s): 124.90
Current Option Gain/Loss: Unopened
Time Frame: up to November expiration
New Positions: Yes, see below

Company Description

Why We Like It:
After a +20% rally from its October lows the S&P 500 was due for some profit taking. Yet the sell-off has been so sharp it makes one wonder if we're seeing a change in trend as investors fret over Europe (again).

We suspect that the S&P 500 will find support near 1200. Thus we're suggesting readers buy calls on the SPY at $120.50 (which is 1205 on the S&P 500 index). If triggered we'll use a stop loss at $118.40. Stocks could see a sharp bounce so we'll try and limit our investment by using November calls.

buy-the-dip Trigger @ $120.50

- Suggested Positions -

buy the NOV $122 call (SPY1119K122)

Annotated Chart:

Entry on November xx at $---.--
Earnings Date --/--/--
Average Daily Volume = 267 million
Listed on November 1, 2011