According to many "gurus" the market must be getting close to a correction. I don't care about that, and anyways XAU tends to go on its own way. Take its one year chart for example and compare it to that of the DOW Jones and you will see why I say that.
XAU itself has been breaking highs over and over, and now it looks like the last hurdle is its peak of December 2, 2009 at $198.32.
(Click on image to enlarge)
It might break it, it might come down, nobody knows, what I know is that if it goes beyond $193.75 I will be closing my upper vertical (192.5 - 197.5 Calls) and opening another vertical more out of the money (200 - 205 Call)
BUY 10 XAU OCT 192.5 CALL
SELL 10 XAU OCT 197.5 CALL
SELL 10 XAU OCT 200 CALL
BUY 10 XAU OCT 205 CALL
By the way if we do it all in one transaction, we save a $9.95 fee in commissions (at least in ThinkOrSwim)
And we can do this by buying a Condor (notice not an "Iron Condor", but just a Condor). This way we are closing a vertical and opening another one in only one single transaction ;) pretty cool eh?
The battle is just beginning folks!!
See the opening on this trade, Trading an Iron Condor position in XAU (September 11,2010)
Follow this trade, Adjusting the Iron Condor (September 16, 2010)
Follow this trade, The Perfect parasite (September 21, 2010)