GDX hasn’t moved that much, but last week many the COT reports I follow had some major shifts which is always a wake-up call that something has changed, That change should be to the bullish side. Even my PUT options watch list saw a major price drop, which would mean there is no longer time for the PUTs to recover and that they will all expire worthless. The addition of a CALL watch list, keeps you feedback in a real time basis, so I see a huge benefit of watching an “Options Pool”. With Options you can always calculate how much will cash will disappear, once the risk to zero is calculated the instant you buy any option. Last week I reversed my entire account before I got up in the morning as I start late at night putting my orders in. I don’t run to my desk when I get up but coffee comes first! Adding options to the mix is going to be the norm not the exception.
Many hate options, but there is a crowd that likes them, and I’m one of them. I think professional traders and hedge funds all use options regularly. If you hate options, because they may expire worthless, is more about how we use them. If readers want more options commentary in the mix then please e-mail me and let me know. Locally I look for traders I can meet face to face with. My buddy has taken a full course on options trading, so if I need any questions cleared up then I will will consult to him. After this bullish phase appears and then starts to stall at the $30 price level, we know we have a big H&S to contend with, but think of them now as friendly H&S patterns.
The Gold/GDX ratio has been hitting a price brick wall at over 66:1 which is not extreme, from a 84:1 major low. The same thing that happens on the upside also happens to the downside, when the ratios seem to slow down and then reverse. At least GDX now has the “C” wave second bottom which is very important for a corrective pattern to complete.