Trade Idea: GDX / NUGT

GDX (Gold Miners) and NUGT 93x long gold miners) are assets we have been tracking for months, it recently paid off with a 40 and 50% trade in NUGT (long), which I closed to take profits as there were multiple signals in GDX, NUGT, GLD and gold futures suggesting a pullback. The idea was to take the gains, let it pullback and buy it back at a lower price.

Both GDX and NUGT are sitting just below their long term base neckline, where a breakout will send these assets to stage 2 mark-up where the real money is made. We caught these VERY early in the cycle and they are still very cheap and few people are on to the trend, however the market consolidates gains and it can do that 1 of 2 ways, through price via a pullback or through time via a price pattern like a rectangle, triangle, flag, pennant, etc.

My issue is I don't want to miss the breakout move, but I also don't want to sit through a pullback and have assets sitting in NUGT that are dead money at best, opportunity cost, etc. However I feel strong enough about the longer term outlook and upside of GDX/NUGT that if I had to sit through a pullback, it would be more of an inconvenience than anything I'm worried about. Recently there have been some positive changes in GDX/NUGT that suggest the consolidation is more of the "time" variety, thus I'll likely re-enter NUGT long at some point over the next hour (I'd like to see it continue to come down a bit more intraday as it seems ready to do).

 GLD's 5 min chart looks like it is still on track for a pullback.

Over the last several years under the F_E_D's "accommodative policy regime", the initial money in the system sent commodities higher, thus inflation, thus gold as buying gold is a natural hedge response to anticipated inflation.

The F_E_D figured out how to do QE/Twist without raising manufacturer's input costs while their prices recieved continued to fall and shortly after Gold topped, you may remember we caught that.

GLD 30 min still looks like pullback.

However...

NUGT intraday keeps seeing improvement days like this

Or GDX's 3 min chart leading positive today

Or this NUGT 5 min leading positive

The original pullback negative divegrence on a 15 min chart is now turning positive.

This is the long term 4 hour inverse H&S base and GDX is just below a breakout.

I find this behavior a little odd just before the F_E_D minutes are released tomorrow and we know they are leaked.

I'll be watching this one, I may post a quick long for a half position and then look for a pullback or continued divergences suggesting I should be in all the way.