Friday, July 18, 2014

Trade Idea: (Swing Trade) DUST Long

We expected GDX/NUGT to make a bounce shortly after they crossed back below support this week, creating a larger false breakout.

That bounce was seen yesterday and exacerbated with the move in gold on global tensions and likely inflationary data from Bullard's comments about the size of the F_E_D's balance sheet being inflationary, but the larger overall trend is still for a GDX pullback (GLD too) and then a primary trend higher, I'd like to buy that pullback, but until it gets there, DUST should make a nice piggy back ride to the pullback area (DUST=3x short GDX).

The signals are looking pretty good for a DUST entry, although I'd like to see a gap fill, but I'm willing to enter a half size position here as it is low risk and if we get stronger signals or a gap fill, then I'll look at filling out the DUST long.

 GDX and the primary support/resistance line.

 This is the GDX gap I'd like to see filled to add to the DUSt position I'm going to enter as a partial position now. A stop can be put on a GDX move just a bit above the highs of this chart.

 GDX 1 min negative from yesterday as we expected to see.

 GDX 2 min leading negative divergence, again expected.

 GDX 3 min from in line to a negative divegrence

GDX 5 min showing the bounce positive divegrence and now the leading negative divegrence.

And the 10 min leading negative divegrence in GDX.

DUST 1 min leading positive, again I'd like to add to the position on a pullback in to the gap.

Here's a wider view of DUST 1 min

DUST 5 min leading positive

And JDSY+T with a strong leading positive 3 min divergence.

As I sid, for now I'm only going with a partial half size equity long in DUST, but if we get a bit of a gap fill, I'll add to it.

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