I really started out looking at this to see whether closing some or all of NUGT (long) or GDX (long) made sense as they look like they may pullback and fill their recent gap, largely because of the way GLD, Gold futures and $USDX look.
This turned in to a larger post because there are bigger issues, for one, the $USD has been moving in its historical legacy arbitrage pattern (weak dollar means stronger stocks, commodities, precious metals, etc.) so the outcome of the near term $USD has an effect of all of those.
Betond the NUGT trade management, this also gives you an opportunity to possibly enter GDX or NUGT on a pullback with good upside probabilities, not to mention gold and obviously has an effect on the market.
I'm not sure where to start so I'll just start where I originally did and let things progress as they did for me going through the charts.
This 10 min GLD chart shows a pretty decent representation of the current trend, from distribution at the early October highs to accumulation at the mid October lows and a leading positive 3C divegrence that is confirming the move up.
I don't think any pullback to fill the gap below would ever show up as a negative divegrence on a 10 min chart, those kinds of pullbacks just aren't that strong. The point being is we do have a pretty strong GLD trend and it's probably worth looking in to as a long, especially on a pullback and secondly, any negative signals are not negative for the trend, they would (right now) just be shorter term indications of something like a gap fill.
*As a reminder, we were probably among the earliest to call a top in gold in 2011, many of you probably remember me corresponding with a well known fund manager who has a website and was a huge gold bug, I had told him gold had topped according to our indicators and we were looking for at least an intermediate to primary downtrend, he had laughed me off in essence, but shortly after gold DID enter a Primary downtrend.
The point of me reminding you about this, is this: Fall in love with your spouse, fall in love with your hobbies, heck, fall in love with trading, BUT NEVER FALL IN LOVE WITH AN ASSET NO MATTER HOW GOOD IT HAS BEEN TO YOU IN THE PAST, IT WILL BREAK MORE THAN YOUR HEART.
The GLD 30 min trend shows the same distribution and the same leading positive divegrence, so in a pullback situation, although we ALWAYS want to confirm, I'd be fairly confident that it would be a constructive pullback meaning it would show accumulation in to the pullback.
GDX (Gold Miners) Also has a similar leading positive divergence in this 15 min chart, the only thing I'm hesitant about short term is the new price high didn't make a new 3C high, nothing to get too worked up over, but it does tend to suggest a pullback is now becoming a probability.
The longer 60 min chart shows no such move because it's too strong for that to show up, it does give a good overview of distribution and accumulation trends. This is a fairly strong chart like GLD.
I would caution not to over-correlate your portfolio with two similar assets unless each were treated as part of the same trade for risk management purposes.
NUGT is the 3x leveraged long of GDX, these leveraged ETFs are where we often see signals first.
This 30 min chart is strong, but not as strong as GLD and GDX, it didn't make a 3C higher high with price so it looks probable a pullback will occur, it will still likely make a for a good long and the probability is a pullback strengthens the asset.
The very long term 2 hour chart leaves little doubt about the future of NUGT, this is also the chart that made up my mind to just hold, We should be nearly at break-even with NUGT (I'm tracking about a -2% decline from where it was entered which is great for a 3x leveraged miner.
This chart should be kept in mind as well on a pullback if you are trying to decide whether you may want to enter NUGT, it's an excellent longer term looking chart, likely a trending position.
If you like, I used the Trend Channel and came up with a plausible stop on a closing basis of $40.25
This is Gold Futures 15 min, this more than anywhere else is where I'm seeing the probability of a pullback.
The 30 min gold futures look strong, they aren't seeing anything like the 15 min chart so I don't think it is position distribution, but likely trading around a pullback or creating one.
This is the SPY (green) vs GLD (red) on a daily chart, there have been several flip flops of correlation, even recently from a risk on asset to a flight to safety such as we saw briefly before the debt debacle was temporarily resolved.
The clear recent trend is the $USD losing ground since July and the most recent thrust to a new low for the year sent gold higher. Keeping that in mind (that the historical correlation is in effect, it's time to look at the $USDX.
This is the $USDX 60 min chart, an accumulation zone led to some upside, but it was distributed pretty quickly and it's been all downside to a new low on the year.
As many of you know, any new divergence will start on the fastest charts first as it forms and then move to longer charts as it strengthens.
This is the 1 min intraday $?USDX, it's leading positive here and whether it's the op-ex pin or the $USD RIGHT NOW starting to move up intraday from this divergence, the SPY has been pinned laterally.
This 5 min chart shows there's some strength as it is leading positive and now it has moved...
to the 15 min chart.
This isn't a huge divegrence by any means, but it is enough to move these assets, whether gold, GLD, GDX, NUGT or the SPX.
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