Make learning options trading your way to beating inflation
Trading options, not GLD, is a great way to fight inflation.
Inflation fears continue to mount in the United States The Federal Reserve raised rates to combat the ever-rising CPI (consumer price index), which recently hit an all-time high of over 9% in last June. That pushed consumer prices to the highest readings since late 1979.
Recent weakness in food and energy prices has helped soften the CPI, which last read 8.5% in July. Better, but still not good inflation news.
The difference between the two-year Treasury yield and the ten-year Treasury yield continued to reverse. Recession could be imminent, regardless of future Fed policy.
Gold Price Find Help
Gold (GLD) prices again held major support at the $157 area.
The shares reached oversold conditions on a 9-day RSI basis before gaining strength. The MACD was also oversold and then rose. Bollinger Percent B briefly turned negative but has since resumed positive territory. GLD is trading at a steep discount to the 20-day moving average.
The previous four times this has occurred marked significant short-term lows in the GLD, as shown in aqua on the chart. A return above the 20-day moving average seems the most likely outcome.
It will be interesting to see if GLD’s recent rally has any significant legs or if it pulls back to retest support.
Investing in gold as an inflation hedge appears to be a fallacy at best. The fact that gold peaked in March 2022 just before the Fed began seriously raising rates eliminates much of the inflation-fighting worries about owning gold.
Instead of gold, consider using the power of POWR options to increase your overall returns.
What to do next?
If you’re looking for the best options trades for today’s market, you should check out our latest overview How to Trade Options with POWR Ratings. Here we show you how to consistently find the best options trades, while minimizing risk.
If this interests you and you would like to learn more about this powerful new options strategy, click below to access this timely investment overview now:
How to trade options with POWR odds
All my wishes!
Editor, POWR Options Newsletter
GLD stock closed at $159.82 on Friday, up $0.84 (+0.53%). Year-to-date, the GLD is down -6.52%, compared to a -13.76% rise in the benchmark S&P 500 over the same period.
About the Author: Tim Biggam
Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Chief Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He makes regular appearances on Bloomberg TV and is a weekly contributor to the TD Ameritrade “Morning Trade Live” network. His primary passion is to make the complex world of options more understandable and therefore more useful to the everyday trader. Tim is the editor of the POWR Options newsletter. Learn more about Tim’s journey, as well as links to his most recent articles.
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