Death Cross

The death cross occurs when the shorter term moving average drops and crosses below the longer term moving average. One of the most common death crosses used is the 20-period and 50-period moving average crossover. A death cross is often associated with sharp downward price movement and can be used as a sell signal in the belief that a significant down trend will follow. The position is maintained until the shorter term moving average crosses above the longer term moving average.

ADAPTED OPTION STRATEGY: SHORT SYNTHETIC FUTURES

When you are bearish on the market, the short synthetic futures strategy is ideal as it will not be affected by changes in volatility. Profit increases as the market drops. Profit is based strictly on the difference between the exit price and the synthetic entry price. Selling a call effectively removes the risk of time decay for the long put position.

SHORT SYNTHETIC FUTURES: Leg 1

Trading Symbol OG Q7
Option Type PUT
Option Strategy LONG
Strike 1250.00
Expiration AUG 17

SHORT SYNTHETIC FUTURES: Leg 2

Trading Symbol OG Q7
Option Type CALL
Option Strategy SHORT
Strike 1265.00
Expiration AUG 17

ADAPTIVE FUTURES STRATEGY

Trading Symbol GC Q7
Strategy SHORT
Entry Point 1254.80
Target 1236.00
Stop Loss 1267.00
Contract Expiry AUG 17

DEATH CROSS: GC Q7 JUN 17

ACTUAL OUTCOME

POTENTIAL GAIN PER CONTRACT

The target is set at 1236 (previous overlapping support). As a trend following strategy, the profit should be taken when 20-period moving average crossed above the 50-period one. It is a good idea to take partial profit when the prices hit the target price.

POTENTIAL DOWNSIDE PER CONTRACT

If prices broke above 1267, the position should be closed with limited loss.

Death Cross Happening Now

Platinum:PL

Japanese Yen:6J


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