The market had an amazing rally yesterday with the S&P's breaking through a critical high at 1207.75 and ending the day up almost 20 points. But like a sumo wrestler after a big meal, the market needs to rest after a big rally. Even after the US adding 151,000 jobs the market is only up three S&P points.
Days like today can be hard to day trade since the market tends to chop around, digesting the slew of economic reports we've been given over the past five days. For those of you that follow Elliot Wave & Fibonacci Sequencing, there are a few cycles coming into play in late November I'll be discussing as we get closer to that date, but for now - there is no reason to be short.
Yesterday, we initiated a long call position in the SPDR Gold Trust ETF ( (GLD); $136.04 at ~11 a.m. EDT) predicting a breakout from previous highs. We finished strong on the day, and despite the drop this morning, we are nearing our target of $136.55. This is a great time to start looking at closing the position. I will be taking off 3/4 of the trade off the table, closing out the options for a quick $1.25 profit. The last 1/4 I will hold on to, moving my stop to breakeven, and see if metals continue to rally into the end of the year.
Sell to close GLD December 134 calls at $5.00.
At the time of publication, John Carter was long GLD December 134 calls.
John is a Commodity Trading Advisor with Razor Trading. McGraw Hill commissioned him to write a book entitled Mastering the Trade, which was released in January 2006. Carter has also been featured on ABC Money. He and Hubert Senters founded and run the Trade the Markets web site.
OptionsProfits For actionable options trade ideas from a team of experts, visit TheStreet's OptionsProfits now.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV