I just sold the short side of my options strangle for July GLD. As can be seen from Figure 1, today is the second time we're testing the \$91 support without success. GLD has been very volatile (like everything else) lately, so there could still be some room down. Perhaps to \$90.50? But seeing that we're entering the July 4th long weekend, the options premium is taking a hit. So I'm exiting my weaker side of this position on a retracement.
The intermediate term bullishness in GLD is obvious to me, see Figure 2. Notice the rising support and the wedge forming. In the short term, like today's action, we touched \$91 a second time after the upward jump from \$90 to \$93 last week. Then we bounced back pretty quickly to the intraday resistance at \$91.38. As I'm writing this, GLD is now up to \$91.49, the high of the day. A more telling sign would be breaking above \$91.50 on good volume.
Anyway, after clearing these puts, I'm long only on the 91 calls. Next week should be interesting as it will be the real start of Q3 2009.
In hindsight, I shouldn't long options prior to a long weekend because of the expected lack of direction and the time decay.
[caption id="attachment_1548" align="aligncenter" width="500" caption="SPDR Gold Shares"][/caption]
[caption id="attachment_1549" align="aligncenter" width="500" caption="SPDR Gold Shares"][/caption]
: http://traderpau.files.wordpress.com/2009/07/2009-07-02-gld.png : http://traderpau.files.wordpress.com/2009/07/2009-07-02-gld_prop.png