Oh oh, GLD jumped up today along with the rest of the market. You’d think that if the stock market goes up because the economy is getting better than Gold would go down. Nope. So I guess the economy is not the reason the market is up today – contrary to what the news tells us.

As long as the dollar gets weaker, the markets and GLD will both go up.

But there was an interesting post on another blog Slope of Hope that showed graphically that Gold might be heading towards a retracement. Check it out if you are a Gold Bug.

OK, back to business. The up move today took GLD outside of our upside Calendar break even.

Here’s what it looks like right now.

So what do we do? I don’t want to add more capital to this, even though that is an option.

Step 1. Take off the spread hurting us the most. [...]

Yesterday I added a GLD trade to the OptionGenius.com portfolio and I mentioned that GLD might be a good candidate for a Calendar Spread. Several members emailed me asking to explain how to set up the trade and the parameters so I decided to just post it on the blog. I tried making a video but I am a total non techie and screwed up the video. I got it uploaded to Youtube but everything on the screen is so small you cannot see what I am doing.

Anyway, here are some screenshots of the trade.

GLD Calendar Spread

Breakevens

The trade was to Sell the Oct 125 Calls and Buy the Nov 125 Calls. That sets up a simple calendar. You can use puts or calls, they are interchangeable but the puts are usually cheaper. The plan is to adjust when GLD hits a breakeven. The simplest adjustment is to just [...]

Is Gold a bubble or the trade of a lifetime?

Maybe both.

I have not been in the gold trade myself. But several of my members are, and doing very well so far.

Here is a chart provide by one such member. It shows that the stock of gold companies, miners, etc continue to appreciate evn though gold prices peaked earlier. If this hold true this time, even if gold has peaked, which it does not look like it has, the miners will continue to rally.

Last week a member emailed saying that it looked like GLD had topped out and would I consider selling calls. My answer: No Way.

This train still has momentum on its side as you can tell from the rally today. What I did do on Friday, was to buy a debit spread in GLD.

I bought the Jan 115 Calls and Sold the Jan 118 Calls. I paid about $100 [...]