Precious Metals It probably hasn't escaped market watchers that gold and silver are having a bull run of historic proportions. Let's take a peak mid-day at new highs in option positions so far this week, dominated in precious metals: The star performer is GLD, with the two calls, one bought in August and one in September, with stand-out gains. These runs have a tendency to go on longer and further than seem natural and that's because its anything but natural. Monitor the trailing stops on all of the above positions and in particular, GLD's October expiration, currently +920%! Don't be shy taking profits if hit, or in the case of Oct GLD calls, anywhere close to being hit. GLD Third wave at multiple degrees of trend. Stocks Stretched, overvalued and unafraid. A lethal combination that could ignite anytime, even while we sleep, waking up to a news driven limit-down open. It's a good time to review Monday's update, "Teetering" and consider putting on a hedge anytime QQQ threatens to drop below $605-600 (round number support). QQQ YTD A 25% decline similar to what was seen in the first few months of the year could trigger at any time. With substantial returns showing in the precious metal option holdings, some of those gains can be booked to fund the QID calls described Monday. Win-win. Nonetheless, without a QQQ drop below $605-600, no official Sell Signal. QID Nov 21st Calls Simple hedge, recommended on QQQ decline below $605 (aggressive) or $600 (official).
