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home | Free Options Trading Videos | UNG and GLD


John F. Carter 12/23/2013

The markets are not open yet. It's about 1:40 in the afternoon so I have no idea when the futures are going to open. I do want to continue our discussion about UNG. This has been a pretty solid trade, it's been a fantastic trade, lots of two and three baggers out there from people that have been following us. So the question becomes now, we're now two weeks...well we'll be three weeks into the weekly squeeze.

What do we do now?

Do we just keep holding in the hope that this goes higher? Well that would be awesome if it did. But you gotta sort of ask yourself now when you get good gains, what happens if this is the top and it starts to sell off…like brutally. Because, obviously, it could happen.

Well the first thing we'll go into ETF, if it does have an underlying contract, let's look at that. And you can note here that we did slam in to some pretty decent resistance, first at the tree line and you can see we kind of popped up from here, came down, consolidated, consolidated, popped up again and getting rejected from that. So at this point it's very very possible -- because you can see on the daily chart we're starting to lose momentum here -- it's very very possible at this point we actually go in to some consolidation on the daily chart and try to build up a daily squeeze.

Now obviously I don't know for sure. You know, we could just keep exploding higher. But remember the point at this is not to blindly hope and pray that it keeps going up and try to count, you know, get an Excel spreadsheet and start counting how much money we're making or could make and things like that. And if you are doing that by the way, that's the first sign that you need to start dumping the trade. But let's take a look at this.

For UNG, you guys have been following this and I'll show you what I have left now. So when I originally took this position -- I don't have my pen here -- but I had 230 of the Delta -- the $17.00 calls and then I had 1000 of the $22.00 calls. Now what I've done -- and I also had some shorter term calls, and I got a hundred shares of stock just to show you where we started doing this trade.

So what I've done is I've actually sold on Friday the bulk of those in the money calls. I've taken considerable amount of risk off the table now and have booked some profits. And this has been a nice nearly $200,000 trade and this has been, it's time to take some profits. And I did take a trim of a 5th of these $22.00 calls. So now you might ask, well John if it's going to go -- if this goes to 24 you would have made so much more money had you held on to everything. Of course I would have. And if I knew for sure that it was go on to 24, I would have held on to the whole position. But I don't know for sure. I'm just very pleased to see this big bounce here. But you know, you can see it's very possible here that we just have a pausing point. And at this point as a trader, OK, then it's up to the trader to take responsibility. And there is a fine line between sitting on your hands and making money, right. That's the hardest thing to do versus when do you start trimming the position.

So I look at this as, wow, we had this nice run on the weekly chart -- the momentum here, this momentum coincided with the play that we've been in for the last several weeks. On the daily we're starting to lose a little bit of momentum. And again I was please to see that we did get a bounce off of this level. But at this point, at least the charts are telling me, that if there is ever a time when you want to peel off some of this it is now. OK. So and again, any market that you're looking at, any trade that you're doing, would fall under these same rules. And the other -- and you know, I've got a lot of set ups that I'm going to talk about in the premium video.

The other one we want to look at here is gold, GLD. We've got puts on GLD. Now we are entering a period of time where this market you know, will be done. In the premium video I'm going to show you how to use copper and watch that to know when the bottom is in gold. But we made a lot of money last week by buying puts in GLD. I mean we were able to, you know, this is everything lined up. You had a weekly squeeze; you had a daily squeeze in gold and able to take a big position.

So now what do we do?

If what I'm looking for is early this week, gold make another low and at that point I'm out of this trade. OK. I'm out of the trade so why just bale on the trade. Well first of all there's some divergences showing up on the copper market, but secondly, remember this squeeze right here, we got a weekly squeeze that is getting ready to go and the daily squeeze is getting ready to go. So if and when we do take out these lows, I think we will, I think we're going to get a pretty decent spike low at least to 1147. OK. But you also just want to be careful here that there are some major divergences setting up in some of the other metals and it's very possible here that as long as we get this spike low this thing just takes off. All right. So this is a very delicate time.

We had a good run in gold, I had a little bit of the position left. And what we want to do now is manage it, OK. So again let's see if this squeeze can trigger short and we can get something going down here. Well there's -- the other thing about this is that there's a lot of political things, geo political things that are setting up for January and I'll talk more about that and how that will impact gold in the premium video, OK. You guys have a great night and we'll see you at the next update.

So if you're interested in this and you can go to simpleroptions.com/tls, what I'm going to be talking about here is this once a year opportunity that comes up like this. I've done this every year for like ten years. It's going to be like two days of live trading and analysis, how to use the low risk high reward tax loss selling strategy, how to time the trades for the best entry, the psychological factors behind tax loss selling, money management tricks and techniques, what criteria make a potential tax loss selling stock, and how to scan for stocks that meet the criteria. OK. And the idea with this literally is we'll be buying them together on the last day of the year and then you can spend the next week or two just kind of flipping them out as all that selling pressure lessens up. Sometimes I've done stuff where sometimes you know, I buy a stock for like 50 cents on the 31st and you can sell it for $1.50 on the first trading day of the year. I mean you see some extreme examples like that but it's just a very unique moment in time where the market makers specifically take advantage of the tax loss sellers. And what we do is we get on the same side of the market makers and literally make a market. OK. You throw out some very low bids, I'll show you where to put them, we'll just kind of sit there and watch as these guys panic and they dump all their stock and we pick it up at bargain basement prices and flip it out at the beginning of the year. All right. It'll be a lot of fun. Again, simpleroptions.com/tls. Hope it helps. You guys have a great rest of the weekend and we'll see you at the next update.