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GLD Ready To Rocket

|Includes: SPDR Gold Trust ETF (GLD)

GLD "Baskerville" Trade

GLD (top), GLD Jan 150 P(bottom)

  1. On 4/42013 GLD broke through the lows established on 2/20/2013
  2. The support break was NOT confirmed by the options - Jan 150 P were LOWER on 4/4/2013 than 2/20/2013
  3. The following day 4/05/2013, GLD returned to values above the close value on 2/20/2013

This is what call the "Baskerville" setup. A a false price breakout. In general, following a false breakout price action can be quite dynamic. I already bought my position but if I did not have any longs, look for any down/flat day to get in. With only the strongest investors left long, there will be nobody left to sell and as a result any pullback can be expected to be extremely shallow.

Disclosure: I am long GLD.