Today just before the close at 12:56pm (PST), we bought GLD (SPDR GOLD TRUST) February 26 calls at a strike price 107.5 cost $1.85 per Contract. We will look at the price of Gold tomorrow and perhaps add some more Contracts to that position.
When we make a trade like this one then it is also important to immediately consider an “Exit Strategy” and we do this by looking at the break-through of previous “Bullish Reversals” generated by Socrates which have now become support.
In this case, in order to decide on our Exit Strategy for the GLD call trade, we look at “New York Comex Spot Gold” and the Gold and the support which now stands at 1,117.00 (major) then 1110.90 and then1108.40 (major). We will probably close GLD calls when and if 1,117.00 and/or 1,108.40 are elected on a daily close.
I say probably because, as time progresses Socrates may give us new points to ponder.
Please Note that Martin Armstrong has made some of his most profit and less risk trades by trading with the reversals, buying or shorting an elected reversal and placing a stop loss just under or above the Reversal Or doing the opposite when prices bounce or drop after hitting the Reversals price.
That is an excellent investment rule. Before buying or shorting have a plan to get out with minor losses..... Or just getting out. He has said numerous times that MAJOR reversals are important and there are a couple here today.
Weekly is also more important than Daily so let's see what Friday tells us?
January 26, 2016