Gold can be a tricky market to trade. It gaps all over the place for seeming no reason. Applying normal technical analysis can be tricky too. This is one of those underlyings where you just have to “pick your spot”. Much like we have been playing the range in crude oil as of late. But here, I am not playing the top or the bottom of the channel or something like that. I am essentially taking the stance that “I don’t know where we are going, but we ain’t staying here!” Take a look at what I mean with this chart:
This is what’s known in very technical parlance as “no-man’s land”! I think one of two things is likely to happen. One thing that is for sure is that there have never been more speculative shorts than right now.
So, either the shorts are going to win out and defend this big move up or they are going to get squeezed and squeezed hard. Like I said early, we ain’t staying here. So, in a situation like this I am thinking two things, either an iron condor or an iron fly. We see that if we give ourselves a May timeframe, using the implied volatility we get a one-standard deviation range of $111.41 to $122.65. The 112 put/115 put/119 call/122 call iron condor is trading $1.50. 
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Gold Is In No-Man's Land
Published 04/06/2015, 03:18 PM
Updated 05/14/2017, 06:45 AM
Gold Is In No-Man's Land
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