The Pasting Begins

Looks like I may have been wrong on gold. Like I may have been wrong on a lot of things....... Finally got nailed today in most of my positions. My NEM (newmont) position retraced again almost back to the original buypoint. At that time at midpoint I decided to add an out of the money options spec play for (RGLD) - Royal Gold with about $650 worth of October $25 call options - 25 contracts - purchased at $0.25. Stock is trading around $23 right now but was around 29 earlier in September. I am again banking on something big tomorrow and Friday and felt like I was ready to invest $600 with what I consider better than 50% odds that the stock will be back above $25 by next week based on higher CPI number and unfavorable balance of trade numbers.
It is definitely a gamble and I can tell that I am getting a little outside my framework in order to make spec trades.

The one nice development is that the XLF trade is moving along quite nicely - up about 35% right now in just 2 days. Lets hope this keeps up and see how things consider this week. I have to remember that it is possible that even bad numbers are spun in a "positive way" late this week. Similar to the many headlines I have read that say "natural gas users to suffer this winter." While as 80% of US population gets their heating from natural gas - shouldn't they just come out and say "Americans" to suffer from high natural gas prices this winter. The article suggests that not many people use natural gas - at least in the headline.

Here are the charts of portfolio composition and also the positions sheet. I am down already $300 on the Royal Gold speculation. Maybe tomorrow will bring better news.

Portfolio snapshot:

Portfolio composition:

The biggest question and the hardest time I am having is how much volatility I want to take on during a day to day basis. I am loving having the short position to offset volatility in the long positions as gold is also being sold indiscriminately here - but as I add more spec positions in gold I am definitely adding to my volatility profile. Things should be clearer tomorrow and even clearer on Friday.

Regards,

BG