VRTrader Update, by Mark Leibovit Options

[TTHQ Staff]

GOLD Letter

Action Alert - Bulletin: December 12, 2011
Buy DGZ
In view of today’s break of the symmetrical triangle to the downside, let’s get our foot in the door on the short-side and buy DGZ at the market which is a one-to-one (no leverage) play on gold’s downside.
Target would be a test or break of the September 1531.90 low. Stop would be the November 8 1804 high. I do not want to purchase the double-inverse ETFs just in case this break turns out to be a whipsaw which sometimes occurs on breaks of these type of triangles. That said, the DGZ at least becomes a hedge position. As you know, I have recently warned (and traded accordingly) that we could be looking a lower gold (and silver) prices over the near term based on recent negative volume patterns. Nothing changes my big-picture view, but, short-term, we have to flow with what’s occurring. Silver has risk back to its November 26 low of 26.00 and beyond that to the low 20s.

View the complete letter here:

http://www.vrtrader.com/files/VR_GoldLette...letin111212.pdf