A “Golden” Opportunity

Andrew Giovinazzi

Yo Pit Crazies,

Both gold and VIX volatility are at year lows, while stocks came out of the doldrums on Thursday because the Fed – surprise – got a bit less hawkish.

That has been good for the SPDR Gold Trust (Ticker: GLD).

And since the VIX itself is not at year lows (and has bounced off of 25 consistently in 2022), Bill Griffo and I think this is setting up to be a golden opportunity.

Let’s run with that pun.

GOLD IV and VIX IV Should Not Be This Low

GLD implied volatility is back to pre-Russia invasion levels.

According to Griff the Russian’s have essentially tied the Ruble to gold. This is good for the Ruble and gold prices. Also, with IV this low, the market is now assuming the Fed is on a path to raising rates for the foreseeable future.

Yet that is not what the central bank dropped in its meeting notes this week, hinting that rate hikes could end sooner. Either way, the Jun15 meeting is going to be another eye-opener.

GLD on-year chart with 30-day and 60-day IVs on the bottom.

So with GLD IV low and VIX IV low Griff and I did the two-fer in Power Gains yesterday and bought a GLD call spread and VIX call butterfly.

Thursday’s rally in stocks would imply that we saw a bottom in the selloff. VIX is still 27 and anything can happen.

The Rundown

Big Money Flow
Mark ran with some Southwestern Energy Co. (Ticker: SWN) calls for 80%.

Power Income Trader:

The Power Gains duo of Bill Griffo and myself closed the last VanEck Vectors Gold Miner ETF (Ticker: GDX) Jul01 33/36 call spreads at $.95 for a 45% gain overall. Griff is 9-for-12 in his last dozen Power Income Trader trades, including wins of 73%, 91% and 94%.

Pro Trade Room:

LRD making a few bucks: