Gold Miners Tumble - GDX Trade Part 3
Welcome to part three of my GDX trade. I’ve been watching the chart closely and I have not closed out my contracts as we are at a critical point technically speaking. Currently, in the aftermarket hours trading were around the $33.50 mark. Looking at the 20 day chart seems to have some resistance around that number. I think if you’re able to hold this line will see a breakout to around $34. However, there is the chance that we breakdown from this level.
Here’s my first and second post detailing the trade premise. You’ll notice this premise has changed. This went from a 1 to 2 day trade to riding out the contracts based on updated technical analysis and the current market conditions.
As of yesterday’s close GDX was around $33.05 the contracts are worth $.29 so they were up 11% for The day, but I’m still down approximately 35% on the trade.
Even as I take screenshots of the chart we keep going up in pre-market so that looks good so long as we hold at the open. The last few days we are going up in the pre-market. However, We begin to be a selloff right as the market opens. Then there’s a recovery, but we trade lower for most of the day until early afternoon where we trade sideways. At close we get a little bit of a run up for the after hours traders to pump it.
Since the contracts expire on Friday today is pivotal. I’ll be monitoring the market extremely close as well as the headlines. As always I would like to make some profit, but this trade is more about managing loss and risk at this point.
Update
Things were looking terrible, but the Fed saved the day and I ended up closing the trade for $20 profit. This just shows you how volatile options are I was down almost $250 at the lows. There’s a chance this continues to run, but I’m just now willing to take the risk with only two more trading days until the contracts expire.
DISCLAIMER: This is NOT financial advice. I am just offering my opinions. I am not responsible for any investment decisions that you choose to make.
