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Unless you were watching the markets yesterday during business hours in Hawaii, you missed all the action. Given that the Pacific islands are not the center of global precious metals trading, one can only conclude that last night’s smack down was blatant “painting of the tape” during the most illiquid time of the trading day.
Someone was gunning for stops, and triggered one of our silver stops, which we closed with a nice profit. Our gold position remains unchanged, but I recommend tightening those stops to protect our profits there. Importantly, there was no technical damage on the daily price charts.
Gold
1) Long two positions from $1339.60 bought on the Comex spot gold close on February 1, 2011. Stop-out point: sell both positions at an intraday stop-out point if Comex spot gold trades at $1372.00. (updated 25 February 2011)
2) Long from $1352.30 bought on the Comex spot gold close on February 3, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1378.00. If stopped out, then re-buy this position on the first Comex spot price close above $1380.00. (updated 25 February 2011)
3) Long from $1372.25 bought on the London AM fix on February 15, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1387.20. If stopped out, then re-buy this position on the first Comex spot price close above $1392.00. (updated 25 February 2011)
Silver
1) The position bought at $29.064 on the February 4, 2011 Comex spot silver close was sold on February 24, 2011 at $31.90, which was its stop-out point. Profit: $2.836
2) Long from $28.45 bought on February 3, 2011. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.45. (updated 19 February 2011)
3) Long from $28.91 on the February 4th London silver fix. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $31.58. If stopped out, then re-buy if the Comex spot price the same day trades above $31.88. (updated 25 February 2011)
4) Buy one position on the first London fix or Comex spot gold close above $33.50. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades more than 38¢ below your purchase price. (updated 25 February 2011)
Comex options (options are high-risk and therefore not for everyone):
The two Mar’11 Comex 26.00 silver calls bought at $2.267 on November 15, 2010 were sold on February 22, 2011 at $6.864. Profit: $9.194
Long two May’11 Comex 40.00 silver calls from 36.2¢, the February 22, 2010 Comex close.
Long one Dec’11 Comex 1500 gold call from $50.80, the February 1, 2011 Comex close.
Hold these calls without any stop-out point. (updated 19 February 2011) View all Trading Comments >>
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