A move from 178 to 181 doesn’t sound all that exciting. 1.5% isn’t shabby for two days but you won’t see that example in too many headlines. But when you use the right tools, like we did with GLD just a couple days ago, that 1.5% can turn into 50% or more.

The key is to be able to repeat that kind of win consistently. Here is what has been working for us.

If you look back at the article from Monday here you can see that we started by looking at the overall market climate and could see signs of an imminent shift starting. That led us to start looking for where money might move when people feel like a broader reversal is coming. Even though the market has creeped up a bit (there is still a lot of likelihood we may see that shift) the signal we saw in GLD was the diamond in the rough.

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We saw the bullish MACD crossover setting up from a pretty low point on the MACD. This is always a high potential trade. But, as we mentioned earlier,1.5% isn’t what we were looking for. That led us to take a look at where the call options were. The GLD Calls for Aug with a 182 strike were under $2, actually closer to $1.75. In just two days, those calls jumped up to $3 and could go higher.

This is the beauty of the leverage of options. It can really boost your profit power. If you are using options or are interested in getting started, check out Chuck Hughes Option Trading Made Easy book. It gets you up to speed quickly and offers some strategies you may not have looked at in the past. Check it out here.

Keep learning and trade wisely,

John Boyer


Market Wealth Daily