We looked at a UNG bull put spread, a directional long play with a deep in the money, hi delta call (jul 10) and a short call on the shorter term month (jul 15).   We filled on that for about 3.19 debit, with the short call worth about 30c (about 30 delta at the time).   The spread is now worth about 4.45, with the short call up to 80c or so.  So we face the nice dilemma of being way up on the trade, but down on the short call, and very wide spreads (the banksters always have a way of getting even) on the in the money call.  Our "options" are numerous.  We can assume global warming reasserts and nat gas will go to zero and just take what we can get for the spread at around 4.45 (tidy gain of 39%).  Or , we can rollout the 15 short call from May to April.   That sounds like a 50c loss, but the credit we take in for April is about $1.15, so we get another net credit of around 35c for April in addition to the 30c for when we initially sold the March 15. 

Or , if we're neutral on gas for the rest of the month, we could sell short credit spreads on either side of the 15 strike and collect about 80c for an iron condor (short 15 / 14 put spread , short 15/16 call spread).  With the 80c short call, that's 1.60 opportunity.  Assuming we're at $15.00 on UNG as we write, if we close above 16, we gain 1 point on the long July 10 put, collect the 1.60, but lose 2 points on the 2 short 15 calls for a net gain of 60c.  In that case, we would exercise our long call and it would get called away and we'd be done.   If we close below 14 , we collect 1.60 and lose 1, still gain 60 c , but we're still in the trade as nothing would get called away.  We'd just close our puts near expiry in March and resell out of the money calls for April and let those hardworking Jul 10 calls continue to generate huge percentage annual returns

There are now a number of outright bull traps with the earnings gapdowns in the sector.   Once NEM and ABX piddle out, I don't see what takes us higher here.  Raised  some more cash on LSG, KGILF, NG, SBGL, OCANF and 1/2 position short GDX weekly CALL spread at 21 and directionAL bear put spread  , 1/4 position 23 / 19 for March.   Not necessarily bearish on the metal, but most stocks are in very precarious situation when volatility picks up after expiry today.  It won't take much to send most stocks careening to the next ledge down.  $19.47 GDX area looks to be fully in play.

In the 4 to 4.5 range 9 day detrend, 3rd time over the past few years at recent highs.   Should work for a few points.  Let's see how a March short iron condor works ... 4c credit as of this note.  LMT , death merchandising bin berry goot, b/out into $1.50 divvy in a week, $209 projection.

Barrick Hussein Gold blasting higher on ernins. Bodes well for GDX intermediate term.  Lots of bifurcation in the index, sellers willing to paste  setbacks or lousy ernins as they did with HMY, GFI and CDE, though CDE was bot hard right at the 200 dma. NEM has looked great, if that is possible.   Leaders in our model port acting well, near old highs, NG.  However, lot of gaps didn't quite fill yesterday.  GOLD, RGLD, etc.  SIL left a gap at 9.56. We've added partial positions in AXU and SVM the past few days, for a good time not a long time , just because of their technical performance against SLV hijinx this week.

SBUX is approaching a pct symmetry projection price.   Last move up was about 15%, right about where we're at now in this move.  Biggest move over last few years was 30% which then collapsed.  AAPL also at a 25% run, similar to last run, though biggest move the past few years was 32%, which would take us to 135 or so.  Note we're grinding near the top of an expanding regression channel.  Gap on 2/11 looks like ripening target on all the momo leaders. Can we slurp and surf our way to prosperity?

Can't always answer the phone with a wrench in your hands. 96% not good enough.

Some portfolio members green today.  AKG getting a bid today.  PVG also green.  Neither have any significant gaps in their bases.   Venture market holding up pretty well, BAR.to is green today.

Still some downside areas to fill on a lot of these.  Leader CDE gap at 6.55, now at 6.91.  RBY gap at 1.05.  Leader GOLD , 2 small gaps , 1.5 to 4 points below, 3 gaps above, creating nice trading range.  We're closing or rolling down some of short call spreads from late last week.  Added the last tranche of short GDXJ 25 put spreads for March monthlies.  Not going to buy back stock until we see some of these gaps that we're looking at close.  UPDATE: ABX is flat ,strong support right at this gap, doesn't want to go don much.  NEM , strong.  Hard to see the 1/14 gap closing on a lot of these with /gc down  $100 already from top.

I'm interested in trying to get an indicator that does exact percentage moves.  I suppose I could do this on tc2000, but it would be nice to have something on tos that could do the "percent above 9dma" or "percent retracement from 3 day high" etc.  The best intermediate trades in the Model Portfolio have come from the 10 , 13% , and 12% , two to four-day , selloffs we've had the past month   Any ideas which oscillators could be used to pick that up?

The Santa Claus to first of the year FOMC worked well.  Since then, the FOMC and Jobs report were used to retrace /gc to the 61 fan at $1220.  We look range bound back to the 1255 / jobs gap scam upside and just below recent lows to the downside.  The last few weeks of trade looks like a lot of options pinning and arbitrage between the better takeover plays (RIOM, NG, etc)  and lower level developers which have been shorted (most of the GDXJ). 

We're left in a spot where the model portfolio has done relatively well with the original 1/2 of the portfolio devoted to high relative strength juniors.   RIOM was taken out, NG, LSG, SBGL. GUY.to, and SMF.to (hit by takeover arb this week, but well-digested) continue to trade near highs.  Nonetheless, it is hard to argue against the notion that the upside risk reward has shifted the to lower quality issues at the bottom of the trading range, at least for the next month.

So , we've shaved leaders to there original portfolio allocations and are about 22% cash relative to the portfolio liquidation value.  We flattened the RIOM position after the takeover and will look to get into TAHO on any weakness.   We flattened the GFI position after a kick in teeth on a buildout delay announcement.  First loser we've felt we had to exit  We picked up a 1/2 position in PG.to after a cash injection / partial takeover by CG.to.  We took small trading positions in TGD and THM, for a good time , not a long time.   We're protecting the 25 /20 strike Feb short spreads (a major win if they go   to zero from 1.1 points, 30 lots) by leaving on some 20.5 GDX Feb longs, and trading around the GDX price.  We put some partial position short calls on again today.

A scan from the late Feb highs till today shows 4-5 of the portfolio mainstays actually positive during the recent selloff.  A bunch of GDXJ components have been arb'd down 15-25%.  So, we would suggest anyone making blanket directional calls is not looking very deeply at the situation with takeovers and combinations on the table.   Fundamentals in demand from the east and new players in the various exchanges bode well for putting a floor in the /gc, too.

The junk in the GDXJ like MUX, ANV etc are in very tight setups here , no gaps below.   5:1  r/r just for a 38 retrace with stops below yesterday.

Silver fills gap at 16.05 and little 1/2 back signal if you like ... SVM green , sssri tailing

RIOM was taken over in a friendly with TAHO yesterday.  We flattened the RIOM position and shaved off some NG to rebalance to original 5%.   Bansksters let us short some calls yesterday on the little pop, which we closed and flipped short monthly Feb GDX, 20.5 calls,  1/2 position.  Since we're still long a full postion of 20 Feb GDX puts, this will allow us to get some of that credit out at minimal risk.  I don't see this yawning gap filling completely this week.

In looking at the last 10 days or so, we can see that GDXJ has no gaps to fill and is in fact outperforming GDX by 2%.  Many of the developmental plays in GDXJ have been eased down substantially and are sliding bullishly sideways out of this maturing fan pullback pattern.  We're looking to roll cash into some of the deeper pullbacks which have been positive in the last 10 days, particularly silvers look good here.   SSRI on the boil today , gap at 5.50 not filling.  CDE much the same, buyable at gap below.  ASM good below $1.50, also.   We like PG.to on any dip, but value and percentage gains if we get a next leg up into March FOMC appears to be with deeper value and not momentum.  Things like RBY extended into gap fill at 1.05,, DPM.to gap fill at 3.14 etc

The bull call spread we looked at yesterday is up 12% from 3.38 to 3.78 as of now.  Much easier to deal with gappiness this way.   The credit you're selling in the front month is essentially your stop loss to keep you in the game if you don't get a quick pop.  Pretty hard to lose money on $2.65 nat gas if you have the means to stick with it. (yesterday's quote on right)

You have pretty easy targets in the 15-16 area, which is $3.00 gas ...  you'd almost have to work at it to lose $$$ on gas down this low

12 / 15 Risk reversal for April with 11 c credit ... if you can handle holding gas at /qg equivalent of $2.50 should it continue to peter out, which it did a couple of years ago... that's a no brainer

Bull put spread on UNG ...July 10 long 85 delta / short march 15 monthly 26 delta for about 3.40 ... you could sell the 25 to 30 delta short calls 4 times and make about $1.20 credit ... if it just sits there, you make about about 80c to a buck on your 3.80 initial call outlay, which is not small cheese, very high annualized rate of return.   If it goes down, you can roll down and lengthen the deep in the money put once or twice and not lose anything.  We can follow this one along.

PG.to taps out new highs as CG.to takes an $85million stake .  Lazarus effect used on CDE to keep it pennies off recent highs after a lovely consolidation and b/out the past two weeks.  CDE also consolidating with Paramount, which has been vertical lately.  Not all bad as one would expect if this were a nascent downtrend.  Still looks like the 3rd wave down of a fan consolidation as this failed move higher comes from fairly deep in most consolidated patterns.

/gc at 38% retracement of quarterly move.  $1220 remains constructive if touched.  We'll see if ABX buyers show up at 11.75.  Preferably we touch out the bottom of the patterns on some of this bigger names and reverse, or we're probably looking at a bull trap into Feb expiry in two weeks.   We have a full slug of long GDX 20 protective puts from a collar and 30 Feb 25 short GDXJ put spreads we want to die quickly.  Portfolio up around 16% since inception.

Kind of in no man's land for a bull call spread, which I personally wouldn't take here, but might 10-15% lower.   55 sort of a short term resistance nows.  But, you could go 85 delta at the 15 May level, if you want to hold that long, and short the March 22, which is 29 delta , to help pay for the May time value and 22 if that's a reasonable target.

I think risk reversals or put sales if you don't mind owning $40 oil.  Gets you through some of the whipsaws.  For instance, if you'd wanted a reversion to the 9dma type trade back on 1-14-15 with the gap above ... a small credit on the 18 / 18.5 april r/r wouldn't have had much time to execute it , then it whipsawed, but if you'd held a risk reversal out a few months you'd be up a couple of points there now.

http://tarpley.net/video/20121030-Yanis_Varoufakis_Address_to_UFAA.mp4

He reminds us that most of the current problems in the world are still a result of the leveraged buyouts of whole economies that were foisted on countries in 2008.   Socialize the debt, privatize the profits, enslave the populace.   Worthless defaulted German bank loans, just like Wall St. subprime derivatives, foisted on Ireland, Greece and wherever they could sucker into someone to paying for them, instead of the German people, or, more appropriately, the German banksters.

The banksters took the model port out to the woodshed for a little stress testing and sensitivity analysis yesterday.  They looked at the short puts and said, "He who sells what isn't his'un, has to buy it back, or he goes to prison."   But we countered with our book of credit-building long puts and said, "You can pay me now, or pay me later."  We settled by putting on a 1/2 lot of GDX weeklies at 20.5 / 19.5 for 22c and put back on 10 GDXJ 25/21 March  bull put spreads for 90c. 

Leaders shrugged off the algo rinsedown and look fine.  GOLD can barely even keep a straight face as it marches higher.  AG great dip entry on the bottom of this flag.  SMF, they just buy more on the dip,  5.25 dead ahead.

Yellin' and covering short calls and rolled down some nominal 28 long Feb calls to 26 March in anticipation of needing them to sell against in the next rally.   We also sold a 1/3 lot of 25 / 21 March GDXJ put spreads for 95c.   Again, we're in the money on May 28 GDXJ puts, so

We see this as exploitation of the range and leading stocks are in bullish fan patterns.  GDXJ looks worse because there are a few major components like AGI and IAG going back to doing what they do best - losing money - and getting shorted again.  There were some significant capital raises, too, a couple of weeks ago.

GFI fanning nicely after a 78% retracement. SBGL the same, right under last summer's highs.  Notice they're not making new lows this week.  These stocks should blow sky high on any renewed strenth in gold.   Also, we're getting some more portfolio out-performance vs. the GDXJ now that the rif-raff in the sector is getting hit again.  They've made some good changes to that ETF, though, have to admit.

A quick scan of the last 10 days or so of the pullback shows OGC.to and SMF.to are actually green in this time frame.  HL, RIOM, GFI, LSG, and SBGL are right there, too.  About 10 of the issues we hold are significantly outperforming the GDXJ in this time period, so this continues to be a buying opportunity.