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