"Overnight turnover was scrappy and stingy as we traded firmly in a $6 range. Open interest was up a couple of thousand and the absolute number of ~525,000 leaves lots of former positions on the sidelines. GSR is unchanged at ~67.05 and implied option volatilities remain cheap at ~16.30. To show the gearing in gold options we shall track for a while the October 1250-1300 call spread we mentioned yesterday morning at a price of $6 per a spread. As of this morning (and after yesterdays $17 move) they are trading at $9. Now for the introductory teaser. I know for a number of years a renowned and disciplined 'Hidden Pivot' trader and chartist, Rick Ackerman. Rick published this morning a very compelling SEPT Silver (currently $18.07) analysis where he sees two promising uptrends. I'll spare you the fine points and leave you with his conclusion,"A two-day close above the $18.460 midpoint of the larger pattern would imply silver is unstoppable and bound for at least $19.595." Thank you, Rick and if we factor this silver target against a modest GSR of say 65.0 we get an implied valuation of gold of ~$1274. Sleep on that over the weekend."
In his first mail to me a few years ago, 'J' informed me that he has a seat on the exchange and knows all 'da boyz'. I have since met this gentleman and can tell you that thoughts he may share are more than standard blog fare.
The gentleman subscribes to my newsletter, and was in fact the first member - after unsuccessfully trying to talk me out of it. :-) He has given me permission to reproduce his morning thoughts on the blog and while nobody but nobody knows what is going to happen, there are folks who have been around the block enough times to have a good feel - and in the markets that is the best we can hope for.
Oh and reading his note in reference to Mr. Ackerman, maybe I don't need to feel too bad about no longer being short silver. Ackerman is a sharp dude too as you may know. --GT
