I have to make some decisions so you may be feeling the same, I have nearly a +20% gain in the core DUST long position, this should see a pullback on a short term basis, if it was in the trading tracking portfolio I'd probably take the gains, reposition and re-emter, being it's a longer term core position in that tracking portfolio, it was entered as a longer term position, it still has all the signals of a longer term position and I think I just leave it alone. If I were short GDX via puts, I'd be taking those gains right now.
If you want to get aggressive in trading and have the time and risk appetite, there's a short term NUGT long trade lining up, that's on the DUSt pullback so it's a minor short term trade and that's it. NUGT with 3x leverage (long gold miners) is sufficient leverage to get the job done in my opinion without needing options,
again, this is speculative and trading against the longer term trend probabilities, but if you're on the ball, you can make some extra scratch.
As for the GLD short that has been working, we entered DZZ (2x short gold etf), there's a decent gain there, but I don't think it's worth it for me personally to trade around, you'd need a short term leveraged GLD long and for the most part I'm not crazy about the options in leveraged gold positions, although the longs are generally better liquidity than the shorts, it's basically the same exact thing as GDX (gold miners), HOWEVER, GLD looks better for a small counter trend trade, I also think overall it looks better for the longer term trend trade, it has just been hammered and is getting too obvious, too many people on the same side of the boat in a zero sum game doesn't work so they'll shake out GLD and GDX will follow through its correlation.
So to be clear, I'm leaving DUST and DZZ (leveraged ETF shorts on gold miners and gold) in place, but there is a counter trend trade opportunity at hand, just speculative.
If the opportunity present and looks worthwhile I "MAY" play an options hedge just for some extra gains, they are not positions (DUST long and DZZ long) I'm truly worried about hedging.
This is all really part of what's going on broadly in the market as covered in the market updates today.
This is the bigger play in GLD, the reason the DZZ position exists, as you know I think GLD pulls back to the lower end of it's base around $115, I want to ride DZZ to that area. Once we are there I expect Gold is going to start looking like a long term bullish play and will look for a new entry there for that trade, but one thing at a time.
The 3C 30 min chart above suggests GLD will continue to trend lower despite some short term noise that is meant to knock all the clingers on, off.
5 min GLD is where I see the DZZ trade pulling back a bit and GLD bouncing a bit, it has become too obvious of a short and retail needs to be swept off the trade and run out (stopped out), so this 5 min positive on a gap down is looking like the area if you are interested in a short term trading play long Gold, just know it is short term in my view and speculative.
GLD 15 min shows it should be a bounce worth trading, but again that's up to you, the larger negative divegrence is what I'm more focussed on.
DZZ which is my play on GLD short (2x short Gold) has gapped up and in to a 3 min negative, this is high probability pullback, I can sit through it though, this is not an options position and there's no time decay that concerns me as it would with an options position, this is why I chose a leveraged ETF over options, to give me time in the position without constantly reacting to every little counter trend oversold/overbought move, just sticking with the trend.
The 60 min DZZ positive is confirmation of the 30 min negative in GLD and tells me DZZ has a lot more upside and is a very attractive position, if you like it, then a pullback is your opportunity to get involved.
GDX
As for gold miners, they are pretty correlated to gold, not as much as in the past, but from what I see they look very similar right now.
Just like the longer term 30 min negative in GLD, GDX has a 60 min negative, this is why I have DUST (3x short GDX/gold miners) as a core/trend position.
Everything still looks good for that position as long as I'm trading my plan.
Like GLD, the short term intraday chart (1 min) is showing a positive divegrence meaning a NUGT/GDX bounce and a pullback in DZZ, but it's a corrective move, not anything I'm concerned about, you could still trade it if you wanted to.
NUGT is basically a 3x leveraged ETF of GDX, this shows confirmation on the 30 min chart of the same negatives in GLD and GDX so as far as longer term trend, everything is still good.
On the 5 min chart though, you can see the small positive building, this WILL bounce, whether you want to trade it and trade around DUST is up to you, the time you have, consider the transaction costs, etc.
Finally DUST (which is the 3x short ETF of GDX/gold miners or the opposite of NUGT) which is the core/trend long I'm leaving open for now is confirming all of the above, the intraday chart shows a pullback is likely meaning a GLD, GDX, NUGT bounce.
However, my reason for picking DZZ was to be able to have leverage to ride a trend, but not so much that I have to react to every counter trend correction.
The 60 min DUST chart has a fantastic leading positive and large base, this is why I'll stick with it as a trend trade.
This is why trading NUGT long is a short term speculative position because this is where the probabilities are even though you can make NUGT work, you just have to understand it's a corrective trade, not a trend change.
If I decide to do anything it will probably be with options and just to take advantage of the signals and add gains, but as I said before, you don't need that much leverage if you want to trade the corrective move, a 2x long Gold ETF will work or 3x long Gold miners like NUGT will work, just remember they are corrective trades, not trend trades.
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