General Options Blog

Silver and Gold – Follow-Up – “Down The Rabbit Hole” Edition

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It was a little more then three weeks ago, when I shared my thoughts on Silver and where I thought it was headed.  Since then, Silver has dropped from $24 to $22.28 or more then 7%. Not the big move to the downside we were expecting, but it surely is a start. We have also been bearish on Gold and Gold miners over the past few weeks, based on the same theme... no inflation, no Eurozone crisis, and an impending bubble in commodities that will continue to burst.

Gold has recently tried to rally and break above the $1400 level, but the Bulls have been rejected each time in a swift fashion. It's only a matter of time before the Bears take hold, and Gold restests the April $1320 low.

Adding fuel to my Gold bear fire, has been the recent weakness in the Australian Dollar, a 'commodity currency'. The "Aussie" traded in the low 60's at the start of 2009 and rallied over 50% based on strong commodity demand in China and other regions. With that demand waning, and the Australian Central Banks cutting interest rates, it's only a matter of time before the Aussie heads under $90, which will help accelerate the pending decline in Gold.

GOLD 5-28 - small

 

We are currently short the AUD/USD from May 19th, and hold puts on the GLD, SLV and calls on GLL, ZSL, and DUST.

Buying Calls Ahead of This Earnings Report

Using stock options to trade earning reports is a high risk proposition.  Heading into earnings option prices will be elevated to account for the possibility of a large move after the company reports.  If the company does not impress or disappoint, the stock could move sideways the next trading session and those elevated options will drop significantly in price.  However if the stock makes a big move post earnings you stand to make a tidy profit assuming you positioned yourself for the move.

Here is the trade I am looking at heading into $GES earnings on Thursday.  I am making this trade based on $GES chart and its recent break of a long downtrend.  Support lies at the $27.50 level, I think a break out will lead to a price of $45 at some point this year.

Trade Idea: $GES - June $30.80 calls

They closed at $.93 would like to get them cheaper and would be happy with $.75-.80.

These options expire in a few weeks.  I will be buying them tomorrow if I get my price.

Another way to trade $GES is to wait until after they report.  If the earnings report is positive then trade for a continuation to the upside and a move ultimately up to $45 over the course of the year.

Trade Ideas: $GES - Sept. $32 calls

Post earnings, if the stock does not rocket higher these calls could drop to the $1 range and that is where you will find my limit order.

 

 

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5-28-2013 Watch List

 

 

Futures are up nicely after the long 3-day weekend as folks realize nothing has really changed. I think we continue to move up until at least late July/early August and the SPY nears 177-181 before we can think about a serious correction. And spoke a little about it in the week ahead, If you missed it, it’s up in the forum : https://www.optionmillionaires.com/forum/showthread.php/427-The-Week-Ahead-with-UPB-and-JB-5-27-2013?p=691#post691

 

 

I had an issue with my computer this morning so had to scramble to get watchlist together. Will have it finished before 10.

 

Here are the strikes I am watching for the open:

 

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
BIDU CALL $105.00 Weekly 0.16 0.15
NFLX CALL $250.00 weekly 0.45 0.45
WYNN CALL $145.00 Weekly 0.16 0.15

 

The Week Ahead Webinar May 27th, 10:30pm

Folks,

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The Week Ahead Webinar has been moved to Monday at 10:30pm eastern due to the holiday weekend. We have updated the Registration link and hope to see you there. This will also be recorded and in the forum before the open Tuesday.

Hope your having a great weekend!

The Week Ahead with UPB and JB occurs several times. Please register for the date and time that works best for you:

https://attendee.gotowebinar.com/rt/6043956393901871616

Join us as we discuss potential trades for next week, market sentiment, and other topics that may help your trades for the week ahead.

After registering, you will receive a confirmation email containing information about joining the webinar.

Brought to you by GoToWebinar®
Webinars Made Easy®

5-24-2013 Watch List

 

Yesterday completed the first 2 consecutive down days since mid April on the SPY, although the market did try and recover and close green. Today the futures are red once again, following Europe and Asia’s action. The Nikkei once again proved to be extremely volatile, starting up over 3%, and then tumbled down 4%, and finally closed up .9%.

With the three-day weekend coming, will be interesting to see how today pans out.

Gold and Silver have found a bit of footing, but I continue to think it will be short lived. ISRG had a favorable verdict yesterday, and the stock is up nearly 4% pre-market, will see if the move has any follow through.

 

Here are the analyst changes for today:

 

 

CRM Salesforce.com weakness a buying opportunity, says Susquehanna
Susquehanna would use any weakness in Salesforce.com as a buying opportunity. The firm cited increased guidance and an evolving business model. shares are Positive rated with a $50 price target

 

 

CRM Salesforce.com weakness a buying opportunity, says Barrington
Barrington says it views any weakness in shares of Salesforce.com following the company's Q1 results as a buying opportunity. The firm believes Salesforce.com is a growth company that will deliver plenty of profitability once growth slows and keeps an Outperform rating on the stock

 

CRM Salesforce.com pullback a buying opportunity, says Lazard Capital
Lazard Capital views the post earnings pullback in shares of Salesforce.com as a buying opportunity and reiterates a Buy rating on the stock with a $52.50 price target

 

CRM Salesforce.com results solid, says Stifel
After Salesforce.com reported higher than expected Q1 revenue and provided roughly in-line guidance, Stifel thinks the results were "solid but not flashy." The firm believes that the company is likely to report stronger results later in the year, and it keeps a Buy rating on the shares

 

ISRG Intuitive Surgical risk decreased by court decision, says Cantor
After Intuitive Surgical won the first of 26 cases alleging that patients' injuries or deaths were caused by the company's da Vinci robotic surgery product, Cantor thinks the decision indicates that the cases will not greatly damage the company's reputation. The firm reiterates a $575 price target and Buy rating on the stoc

 

P Pandora price target raised to $24 from $20 at Piper Jaffray
Piper Jaffray raised its estimates and price target for Pandora citing the company's strong Q1 results and improving monetization. The firm keeps an Overweight rating on the stock

 

CRM Salesforce.com downgraded at Wedbush
As previously reported, Wedbush downgraded Salesforce.com to Neutral from Outperform. The firm downgraded shares due to the significant decline it Q1 deferred commission expenditures, an indication that new sales activity in the quarter was down substantially. Price target lowered to $42 from $51

 

 

May look to get some more OPEN positions today, as well as possibly playing some TSLA calls for a possible $100 break. Folks are asking me about ISRG and my thoughts, think it will be hard to get a good position with the large spreads and high premiums, but stay tuned to chat and twitter for updates.

 

Here are the strikes I am looking at for the open:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
TSLA CALL $100.00 Weekly 0.25 0.20
OPEN CALL $80.00 June 0.35 0.30

 

 

Dont forget the week ahead Sunday night at 10:30 : https://www.optionmillionaires.com/live-event-classes-jtv/

 

Lets have a great end to the week and EVERYONE HAVE A GREAT Holiday WEEKEND!!

 

- JB