We're at $98 on GLD, I see it pulling back to lower $90s ($92?) - when we get there I'll exit out of Powershares Gold Double Short (DZZ)
I'm starting with a 1.4% stake around $18.90... if we get a panic open tomorrow and gold spikes I'll add more. First time I have touched this instrument so hence the relatively small position size.
I love crowded trades because I know the guy on the other side of this transaction was me about 9 years ago ;)
Long Powershares Gold Double Short in fund and personal account
7 comments:
That's a gutsy move! I actually think that the only reason why gold hasnt broken above 1000 yet, is because of govt intervention, and when it does it should spike hard.
Again, I'm glad you said short term, because I hold gold, long term, my target is 1500 in 2010. So perhaps we can both be right, you short term, and me long term :)
Yep, a lot of these trades are a "rebound" trade in the market.
Just imagine the mood swing if we get back to S&P 830 or so... everyone will be goody and screaming about successful retests and government is good.
The swing from fear to greed is a short step. I still think we are in a deflationary stage but what is helping gold is the currency issues wracking the globe. More than inflation which is its usual role.
Probably a 3-10 day trade.
This is an interesting short, as it's the first short you've taken of a security that is in a confirmed bull market.
I agree that gold looks tired here, and the gold mining stocks have lagged this most recent push to the $1000 level, so we are likely due for some consolidation.
However, a trade-able drop in gold is only likely if stocks begin a sustainable rally. And not just any rally, but a rally led by FINANCIALS or, at the very least, commercial real-estate and consumer discretionary sectors, such that financial company and/or CMBS credit spreads narrow significantly while stocks spring higher.
You're better to purchase leveraged versions of IYR, XLY, or XLF, as they are trading well below their lower Bollinger bands and are likely to give you better juice on this thesis.
Gold is forming a double top and we sell double tops.
Gartman says its more likely it continues up.
3 times I played DZZ, never held GLL.IV, or DGZ the other gold shorts.
I got stopped out with a 2% loss 2 weeks ago, now it's your turn.
Good luck.
Bravo, TM. Nice gutsy trade.
Indeed a great call. So you think gold can drop to the 90-92 range?
I'm not greedy, GLD at $92s will be fine for me for this trade
I don't try to extract every ounce of blood from stone esp in this market where things reverse on you in a second
for that matter until the trade is closed its not good bad or indifferent. So far so good... not complete yet.
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