The end of the week has been consumed by Gold, Silver and the weather, as a historic winter storm has set its sights on much of the country. I've made my home in the Arizona desert since 2007, where the term, "winter storm," is synonymous with a few clouds and long pants. I do miss elements of the mid-west and east coast winters though: Pond hockey, weekend skiing and driving on black ice. Ah, those were the days, eh? Good luck to all caught up in this weekend's storm. I'll be at the pool, working on my spring tan. The Duck Test "If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck" Someone asked me last weekend if it was too late to buy into the run in Gold and Silver. That was before we jumped into GLD calls on Tuesday. My answer was to the point: No, it's not too late and it may very well be just in time. My Reasoning Picking the top in any market is problematic. You are going against an established uptrend. That's a no, no, when it comes to trading. How may times have we been stopped out of QQQ puts over the past few months? Gold and Silver are no different. They have been in an established up trend for years, a parabolic uptrend for months and now a fresh slew of breakouts in the first few weeks of the new year. As I wrote on Friday, every new breakout is buying opportunity. Our latest buy was Tuesday, the GLD March 20th $475C, which as of Friday's close is +150%. Too late to buy? I don't think so. In the Midst of Something Special I shared current and recent past precious metals option performance tables on Friday. For those who missed them, I'll post them again below as they are worth study. Consider those returns the highest and best argument I can make for going long (and/or staying long) Gold and Silver calls now. It will take a few losing long trades to convince me anything other than a ongoing bull market is in complete control. Historic- parabolic- mania-irrational, call it what you will, we are in the midst of something special, until we are not. Recently Expired Gold and Silver Options PRO Service Premium Service Past performance is not a guarantee of future success. Speaking of Which: Future Success (Our Current Trades) Note that all of the "Current Trades" in the performance tables below have been initiated over the past two months, approximately six months after the beginning of the parabolic move higher in precious metals and that most of these trades were made while the sector was overbought and over-loved. PRO Service Premium Service The above trades are now all in pure money management mode, meaning all are subject to trailing stops, 50% from the Best Return as set out in the far right columns. Absent a gap down deep dive day, use "close-only" to determine if stops are hit. In the event of such a deep dive, I'll post a Special Alert with any updated trade management parameters. Stock Indices The QQQ chart below has key price demarkations above and below current price levels. The are my mental triggers to get bullish or bearish the stock indices in general, and QQQ in particular, basis price breaking above or below the indicated levels. Price will lead the way if and when we have a new trade in either direction. Yes. we have been fooled to the downside before, but one of these days the trap door will be for real and those puts we are triggered into will behave much like the GLD and SLV calls above. You can thank me then. QQQ Daily DJIA Daily This DJIA chart marks twice over the past few years where the Dow broke a long standing trend line and suffered sizable declines. Note also that those breakdowns came in the first two months of the new year, exactly where we are today. If the Dow breaks below the current trendline, assume a tradable decline is at hand. Dow Close-Up A close below DJIA 48,000 would be a high confidence short, especially if it coincides with a breakdown in QQQ. SPX Another trigger for a short: < SPX 6800 Active Option Positions PRO Service Premium Service
