Category Archives: Trading Ideas

18th December 2013 — Can the FTSE make it to 7,000?

This is turning into a bit of a crunch time for the FTSE100. The Santa Rally has faded and the index has been treading water since the start of December. The hopes of the bulls to see 7,000 before the year end are currently hanging by a thread. Today’s possible taper decision by the FOMC is almost certainly behind this month’s lacklustre performance and the question now is how will the market react to whatever is announced this evening?

From a technical point of view, the MIDAS Method provides an extremely clear view of the current state of play. It is just up to MIDAS users to decide what to do. Below is my plan.

 

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6th December 2013 – MIDAS support for gold at $1,206/oz

So, this been quite a week for the precious metal.

To say the trade has been choppy would be quite an understatement. Four of the five trading days have seen 30-40 intraday moves. We’ve tested some of the lows set earlier in the summer and there is a feeling something significant is going on in this market at present. Earlier today, our proprietor, Richard Jennings, wrote another bullish call on gold, pointing to further evidence that a bottoming process is playing out. A cursory glance over the chart below, strongly suggests he could be right:

 

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4th December 2013 – Another day another massacre

Following on from my last piece about the current collapse in gold and gold mining stocks, this is starting to look more and more like a capitulation event. And as we all know, for a market truly to bottom it first needs to capitulate.

To recap what I wrote yesterday, I believe that the market for gold is going through a fundamental change. Gold itself is fast transforming from a crisis trade, in anticipation of the financial system collapsing or blowing up in a hyperinflationary boom, to a fundamental play supported by the true cost of production. An investment company, called Hebba Investments, has been publishing a series of research reports on Seeking Alpha for the last few years. They have developed a model to calculate the all-in production costs of the world’s largest listed miners. In their latest note they estimated that the average all-in production costs for these companies (accounting for more than 25% of the world’s supply) were $1,221.75/oz during Q3 2013.

At this very moment gold trades at $1,215/oz.

 

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12th November 2013 — Speculative buy: oil at $95.71

In August’s issue of SpreadBet Magazine I wrote that the Gold/Oil ratio suggested gold was due a rally and/or oil was due a pullback. Although I have remained bullish on gold throughout the summer, at the time I thought it more likely that there was a decent opportunity to short oil. And so there proved to be.

(As an aside if you haven’t added the Gold/Oil ratio to your watch list it probably is time you did…)

 

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26th September 2013 — GDX, an alternative leveraged gold play

The GDX (or Market Vectors Gold Miners ETF as it is rather long-windedly known!) has been causing a bit of a stir, here at Spreadbet HQ, over the last few months. This ETF bundles a collection of gold and silver associated stocks together in an effort to track the NYSE Arca Gold Miners Index (GDM). It offers investors and spreadbetters a leveraged play on the price of gold and is tradeable on the larger spreadbetting websites.

Now I know I’m about to bang on again about yet another gold related story, but bear with me. This really is an exciting time for the precious metal and if our house line is right (buy, buy, buy!) then this could prove to be an exceptionally profitable trade. As with all these things, timing is everything and now looks like the time to be buying. Even if we are wrong, downside can be managed with fairly tight guaranteed stops, so the risk/reward is definitely on our side.

 

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