Unfortunately I can't access the website for the model portfolio today as they are having some issue loading, but if I could I'd be considering a partial position in GLD using July puts just in the money by a few dollars. For risk management this would be considered a speculative trade and I'd enter a half size position and leave room for the possible head fake move above Friday's intraday highs. This type of trade is for nimble traders who can pay attention to it and get out quickly if need be.
Again, I would only consider entering a partial trade and leaving enough room in my risk management to allow for a move to the $156 area where I would be looking to fill out the rest of the trade so long as conditions remain suitable.
Traders are always looking for the huge volume surges, but there's really not much of an edge in seeing what every one else can see. Quite often it is the subtle changes where we find an edge that the crowd misses. For instance the sym. triangle in GLD, note the breakout above the apex intraday on this 5 min chart, volume didn't surge, but it did pull some longs in the trade, when prices crossed back below the apex trendline, notice the red volume bar picks up as longs who entered stop out as they see a quick loss. When looking at this volume, you must consider this isn't a huge, obvious price pattern and it is only intraday, but the clues are still there if you pay attention. So we've seen some longs already get burned on the failed breakout in GLD, it may very well do it again and that's why I'd leave some room to add and above all, consider this a speculative trade, this isn't the trade to go swinging for the fences.
Traders won't likely enter GLD again unless they get a greater price movement, at least above the first white trendline, the second higher white trendline would be even more important to the as it represents a new intraday high. Ultimately I would want to enter GLD above the white arrow as that would represent a stronger head fake move and you'd have less risk and better positioning.
Here's 3C and the triangle's breakout, note the intraday distribution on the breakout sending GLD back below the triangle's apex, 3C is also leading negative here which is a change in character for intraday trade today for the worse.
The 3 min chart continues its negative divergence, especially at the failed breakout of the triangle.
The more important 15 min chart shows a negative divergence at Friday's highs and as GLD travels mostly sideways, the divergence is turning in to a leading negative divergence which is worse than the relative divergence marked by the red arrow.
If you have the patience, you can wait and see if we can get a bigger upside head fake move in GLD, there's much less risk, however you may miss the move if GLD doesn't make it up there. Entering a partial position and leaving room to add is a compromise. I personally would rather wait for a bigger head fake move as it would be a more solid trade and there's a thousands of stocks to trade, but we have had some decent gains on quick moves in GLD over the last week or so of 30-40% in a day or two using Puts.
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