Earlier I increased the GLD short in DZZ long (2x short gold), usually GDX (gold miners) isn't too far off from the action in GLD and I so have an active DUST position (long) 3x short gold miners. The position could be doubled and still within position size limits, but there's one thing that GLD had this morning that DUST and GDX are still missing, a head fake move which is one of the best timing flags for a reversal as we see these in every timeframe on all kinds of reversals about 80% of the time.
The question isn't whether I like the DUST long, I do, the question is, "Is this the best time and area with the highest probabilities and least risk to add to that position?" and I can't say, "Yes" to that question so for now I'm going to let the DUST position stand as it is, at about half size which is currently at a loss of about -4.62% which is nothing for a 3X leveraged asset in a volatile industry.
Here are the charts and what I'm looking for (the alerts you might set if you are interested in the position)...
First starting with GDX (Gold Miners)...
GDX 60 min has a clear negative, more so than GLD, these two may be on slightly different paths which may not be surprising given the China ordeal and the mining industry there specifically.
However you've followed the concepts, what do you see missing on this 60 min chart that GLD is NOT missing this morning? There's a stage 3 top area, there's obvious resistance, what's missing is a head fake move though resistance.
GDX 5 min is negative as well, but there are a couple of charts that are not as clear as the 5 and 60 min, I don't think they present a big problem for the DUST position open, but as far as an add to or a new position, I have to ask if I think this is the best place and the least risk and I just can't answer yes to that question yet.
The 15 min chart is one of those charts I'm talking about, it's in line, so I'm guessing this DOES need a head fake move before it's really at the best entry and lowest risk.
As far as the actual trading vehicle goes, that would be DUST (for me) 3x short gold miners.
The 60 min chart of DUST makes sense with the divergences, a negative brought it down and we have a positive with very clear and defined support, just like GDX has clear and defined resistance in the same area so once again, I see a head fake move as being the high probability set up being this is such defined support/resistance, the better defined those areas are, the more likely they are to be hit with a shakeout before the actual move commences.
I could be 100% wrong and DUST may be the perfect entry here, but from what I know about the concepts we see and the probabilities, the probabilities say, "Wait for the head fake move, this is too defined for there not to be one".
In the end all we can do is make the best decision we can with the information we have at present.
The 15 min chart is beautiful, great confirmation on the downtrend and a positive right at a range where you'd expect to find it.
In many ways DUST looks better than GDX as far as the DUST trade goes, the problem with that is they trade inverse to each other and if one looks better than the other, we don't have as strong of a confirmation signal as we could have.
5 min DUST, I couldn't blame anyone for going long DUST here, I have an open long here, still in the very near term, I still can't say I think this is the best entry and lowest risk.
2 min chart is even positive.
However,
for me to add to DUST or short GDX, I need to see DUST break UNDER $18.50 or GDX above $27 on a head fake move, that is where I'll set my price alerts.
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