What a week for markets!

Oil has continually trended lower with a big break on Thursday that allowed us to rotate our position, and while the signal is still to stay short, I am a bit concerned with this with the oversold conditions.  That said, I trust the signal and am using a put spread to reduce the overall Gamma exposure for this reason.

Gold and Silver crashed and spiked.  The new month clearly brought an allocation to precious metals, but the signal still says to stay short.  I was worried about this, which was why I held calls as a hedge in both commodities, and this decision was clearly the correct one.  Now, though, I am looking for a return to the down trend as bond yields continue to rise and USD/JPY continues to strengthen.

It was a choppy week for commodities, but a profitable one.  I look forward to the week ahead to see how the equity indexes will impact money-flow into commodities!

 

Thanks again for subscribing to Option Hotline,

Keith Harwood