The suprising correlation between a turkey and a short-gamma trader

 

A short gamma trading strategy involves being naked short options (often slightly-out-of-the-money short dated options) and collecting the premium

Short gamma traders can be profitable month after month after month and year after year after year — until they go broke. In this respect, a short gamma trader has the life cycle of a turkey.

Happy Thanksgiving

 

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The History of Gold Charts

 

Gold — the ultimate charting market

 

If you are unable to view the embedded pdf, click link here.

[scribd id=113820362 key=key-1iuxk1b8pcno02tgkynu mode=scroll]

 

$GC_F, $GLD, $IAU

 

 

Bull market in USDJPY has begun

 

Charts point to a target of 94.00-plus

The $USDJPY is forming a possible bottom of major significance. The weekly graph below shows that the market is rounding up to a 2+ year H&S bottom. A close above 84.50 is required to complete this pattern.

The right shoulder of the weekly H&S pattern is itself a H&S pattern on the daily graph (albeit awkward). This pattern could be completed by today’s strong advance.

The Yen has a tendency to really rip when a trend begins. While the market may appear overbought with the advances of today (if it holds) and yesterday, I believe being long USDJPY has a very measurable risk to below Wednesday’s low.

Markets: $USDJPY

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The anatomy of a developing trade – short AUDUSD

 

AUDUSD chart construction is becoming remarkable

I have never used this blog to track my actions in an individual market over a period of time. I will attempt to do so in the $AUDUSD in the period ahead. If the market unfolds as I think it might, I will explain my entry (leverage, sizing, entry and trade management decisions) and exit activity. If the market does not unfold the way I think it might, well, then this was

The weekly AUDUSD chart displays a 16-month symmetrical triangle. While this pattern could become either continuation or reversal in nature, right now I have a slight bias toward the short side of the market. Nevertheless, I would go with an upside breakout.

 

The daily chart displays a possible 4-month H&S top pattern. That the left shoulder is almost of equal height to the head does not disqualify this pattern as a H&S top.

 

The right shoulder of the daily H&S top displays a possible wedge or channel pattern. A close below the Nov. 9 low would complete this wedge and indicate that the right shoulder high is in place.

 

I will be monitoring the daily and intraday graphs. I will short a close below the Nov. 9 low, risking 1% of my trading capital (in other words, per $1 million of trading capital I will risk $10,000). If this trade unfolds I will provide more detail.

Markets: $6GA_F, $AUDUSD

Gold is in a new bull market — see important charts

 

Gold (priced in Swiss Francs) has begun the next leg of its bull trend

As many of you know I use the Gold/Swiss Franc ratio as a leading indicator of the price of Gold. This indicator can be used to trade Gold against the U.S. Dollar or directly against the Swiss Franc in a USD-neutral trade.

The monthly, weekly and daily charts of the Gold/CHF ratio conclude the following:

  • The longest-term trend (monthly) remains solidly up
  • The medium-term trend (weekly) has a history of developing congestion areas prior to each new advancing thrust
  • The daily graph completed a 12-month symmetrical triangle in August. The October break in Gold simply retested the upper boundary of this triangle. This retest appears to be over — and the next advancing trend in Gold has likely begun. Only a close below the November low on the daily chart would cause me to rethink this interpretation.

The Gold/CHF ratio has a target of CHF 1,800.

 

Markets: $GC_F, $USDCHF, $6GS_F, $GLD

 

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