Gold Correcting, so Buy Apple

by JDH on November 25, 2017

It would appear that gold is entering a correction phase.

Of course I’ve been saying that for weeks, and a significant correction has not occurred, but that appears to be where we are headed.

Gold is in a downward wedge, and unless it snaps out of it in the next week or two, a correction below $1,200 is possible.

I’m not predicting it, because my powers of prediction are weak, but I am conserving cash and taking profits on my gold stocks that have done well lately.  For my long term blue chip holds, like FNV.TO – Franco-Nevada Corp., I am doing covered writes, to lock in profits.

I continue to hold JDST – Direxion Daily Junior Gold Minders Index Bear 3X Shares, currently at a small loss, but if gold corrects a few dollars this week I’ll take profits.

So what is one to do in this market?

Ride the bull, baby.  There is no sign that this crazy, debt fueled bull market is going to end anytime soon.

Buy Google, or Facebook, or Amazon, and you will probably do well.  I can’t monitor every stock, so I take the simple approach and speculate with AAPL- Apple Inc.

When a stock is hitting new highs it is difficult to project where it will go, but I took a shot with Fibonacci lines, and it’s easy to make a case for Apple over $190.

So, this week, while Apple was a bit lower, I bought some stock.

I did the same with Apple two weeks ago, buying the stock around $172.40, and doing covered writes at $175.  Amazingly, the day before expiration, my stock got called, so I got $175 and kept the premium.

Apple subsequently corrected below $175, so I bought back in.

I expect strength this week, so probably around Wednesday I will do another covered write, at a price a dollar or two above where it’s trading, for options that expire at the end of the week, and I’ll either get called again (and get a win on the stock and keep the premium), or I keep the stock and the premium.

I see it as a low risk way to ride the bull.

That’s the plan.  More next week.  Thanks for reading.