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GDX

THE WEEK AHEAD (PART II): HPQ, CRM, COST, GDXJ/GDX, USO/XOP, EWZEARNINGS: ... with June monthly at-the-money short straddle price as a function of stock price shown: HPQ (38/62), 14.3%: Announces Wednesday before market open. CRM (54/46), 8.7%: Announces Thursday before market open. COST (35/32), 6.5%: Announces Thursday before market open. Notes: Ordinarily, I screen potential earnings announcement volatility contraction plays by rank and for 30-day greater than 50%, but we've had a volatility pop in the last 52-weeks such that implied rank or percentile isn't necessarily as informative as it was. Where this happens, I look at whether the underlying is going to objectively pay or be worthwhile, using the at-the-money short straddle price relative to the stock price in a potential evaluation of that (i.e., the HPQ June at-the-money short straddle is paying 14.3% of the price of the stock). A good rule of thumb is that anything paying below 10% of the stock price is probably not worth it as a volatility contraction play in single name, so HPQ would probably be the only earnings play I'd consider putting on here, with the June 19th 17 short straddle paying 2.42 at the mid price and the skinny June 19th 15.5/19 paying 1.09, although the markets are wide here, so would look to recheck setup pricing running into Tuesday close if you're keen on putting that play on. EXCHANGE-TRADED FUNDS SCREENED FOR >35% 30-DAY AND ORDERED BY RANK WITH JULY AT-THE-MONEY SHORT STRADDLE PRICE AS A FUNCTION OF STOCK PRICE SHOWN: SLV (48/38), 10.8% EWW (44/42), 11.6% GDXJ (43/61), 17.7% TQQQ (41/87), 24.3% GDX (40/48), 14.5% XBI (38/41), 11.8% EWZ (36/55), 15.2% XLE (35/47), 13.2% SMH (31/28), 11.4% XOP (24/57), 17.1% USO (23/86), 21.8% ... AND ORDERED BY AT-THE-MONEY SHORT STRADDLE PRICE AS A FUNCTION OF STOCK PRICE SCREENED FOR >15%: TQQQ (41/87), 24.3% USO (23/86), 21.8% GDXJ (43/61), 17.7% XOP (24/57), 17.1% EWZ (36/55), 15.2% GDX (40/48), 14.5% Notes: Here, TQQQ looks to provide the best bang for your buck, but I generally shy from leveraged products unless I can't resist doing something in the direction of the way the fund is set up. (See, TQQQ Post Below). Secondarily, USO/XOP have some juice, as do GDXJ/GDX, with the hammered EWZ rounding out the top five. Pictured here is a GDXJ July 17th (53 Days 'Til Expiry) 40/56 short strangle paying 2.75 at the mid price with delta/theta metrics of -1.52/5.55. BROAD MARKET, ORDERED BY AT-THE-MONEY SHORT STRADDLE PRICE AS A FUNCTION OF STOCK PRICE: IWM (47/40), 10.9% QQQ (29/29), 8.3% EFA (29/26), 6.8% SPY (28/29), 7.8% Notes: Here, the juice is in small caps, with the IWM July 17th, 16 delta strike 115/151 short strangle paying 3.39 at the mid price and delta/theta of -.1/8.27. IRA DIVIDEND PAYERS ORDERED BY RANK: EWA (47/39), 36.8% above 52 week lows; IYR (44/36), 31.5% above 52 week lows. XLU (38/25), 30.3% above 52 week lows. EWZ (36/55), 25.1% above 52 week lows. HYG (31/17), 20.5% above 52 week lows. EFA (29/26), 24.6% above 52 week lows. SPY (28/28), 35.4% above 52 week lows. EMB (22/18), 24.6% above 52 week lows. TLT (20/18), 29.2% above 52 week lows. Notes: I'm sticking the "above 52 week lows" out there just to show how much of everything has bounced, so it wouldn't have taken a genius to wade into the market, sell some out-of-the-money short puts in high implied and made out in some fashion. (See IYR, EFA, HYG Short Put Ladder Posts, Below). Conversely, that bounce means that things weren't as cheap as they were at the lows, so it may be time to sit back and wait for another sell-off or high implied event to wade back in with acquisitional setups, with the general elections in November being the next possible opportunity. In the mean time, I'll continue to work the call side in the covered calls I've got on now.
AMEX:GDXJ
by NaughtyPines
Gold to Test ATH Soon?With the unemployment rate being announced later this week I have been keeping an eye on the gold markets for clues on a direction. Expectations are that unemployment will increase substantially from the last reported 4.4% to levels that haven't been seen since the 1930's. However, the price of gold hasn't really "outperformed" during the Covid-19 pandemic when compared next to other asset classes which begs the question, will the unemployment numbers really matter? Looking at the charts gold has been in consolidation since breaking out of the inverse head and shoulders on April 6th. Price has retested and been trading flat since April 14th. The chart below is of the SPDR Gold Trust ETF (GLD). Current support is 156.95 and is a must hold if more upside is to follow. On the 4-hour chart above, I've highlighted how volume increased on the break of the inverse head and shoulders, and as price returned to retest support volume has settled nicely. MACD confirms this and is beginning to show potential strength in bullish momentum. If GLD breakout, targets should be set towards 174, which conveniently is nearly all-time high resistance. How confident can we be on this trade? Below is the weekly chart of GDX, a Gold Miners ETF. Here, note the weekly retest of previous resistance at 31. How strong the support remains to be seen, but the strength on the gold miners is undeniable and reaffirms the gold trade to the upside. Heading into the potentially historic unemployment announcement this Friday, it may be a safe bet to look into gold if you believe in the safe haven narrative. If you are a trader like me, GLD and GDX present opportunities to make 10-20% returns in a short period. Bias: Bullish .
AMEX:GLDLong
by DailyClose
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