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Easing Out of a Big Week

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.

SPDR Gold Trust ETF (GLD) Daily
Source: TradeStation

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.

SPDR Gold Trust ETF (GLD) Options Chain
Source: TradeStation

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.

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