Today we got the gap down in gold and silver and both metals meandered at these lower prices with silver signalling a daily red arrow down. JDST opened up over $9 a share and the various mining ETFs opened down but a reversal occurred mid-day and JDST turned red and the miners all went green.
In a sense we got the volatility for this Fed meeting week not with the metal itself, but with the miners. This was a rather bullish move by the miners after being hit hard on Friday with gold’s fall below $1,300 an ounce.
Trading the week of the Fed meeting is always a risky venture. You can’t predict typically what direction market makers will take the metals but you can take an ETF for a ride when it breaks to a higher high. Alternatively, if you were trading the trend one way you have to recognize a lower low is a sign to get out (like with JDST today) and either stay out and analyze the direction or jump to the higher high ship (like with GDX, GDXJ, NUGT and JNUG.
For example, JNUG was a good buy at 34.74 the new high of the day and it could have been held all the way till the end of the day at 37.61. With gold down I wouldn’t have kept over night and after hours it’s already trading down 17 cents from that closing price of 37.61. I don’t think anyone would have complained with a $2 to $3 move up on a trade and it was a nice set up at about 2:32pm EST.
Tomorrow is a guess as to what the miners will do, but gold is heading down after hours from between $5.00 and $6.60 in the mid $1,270’s. I would simply play the higher highs with stops and keep an open mind that there could be intraday reversals.
Other ETFs
UWTI and UGAZ are both still struggling to find some sort of bottom. I actually like the risk vs. reward for both but keep in mind that it’s easier to catch a rising trend (higher high) than a falling knife.
TNA started the day lower as the news from Greece was settling in and I had said yesterday that I wanted to see what would happen today before saying whether I thought the “buy the dip” trade would be good. I’m still in the buy the dip mode but keep in mind the Fed announcement can play some havoc to normal trends and keep stops. TNA did break through 79 today and now seems as if it wants to break through the 80 mark once again in what would be its 4th trip in the last year.
RUSL is back on the watch list. Down 22% today after an S&P downgrade it is back in the $15 range where it has bounced from before. I don’t see any bounce from this level this time and foresee a move back to the $10 level as a higher probability with this news. See catching knife comment above.
Gold and Silver Stock Mining Package
We will be coming out with a mining package where we pick what we believe to be the best mining stocks to buy based on my research the last 8 months. We have been patient in releasing this because of the timing in purchasing these mining stocks can be tricky. We were one of the only one’s who recommended selling mining stocks in September of 2010 when the HUI was trading at 512.56. Much has transpired in the mining industry since that call with many companies disappearing or being taken over. Today many companies are struggling and if we do get a further pullback in the price of gold and silver, more companies will go bankrupt. Knowing which companies have the best opportunity moving forward will be key to you getting returns that we believe will be in the 100% to 500% range, and possibly much higher for some of the miners. This package will be released in the next few weeks and we will announce it on the site.
If you are interested in this Gold and Silver Stock Mining Package let us know by clicking this link below and completing the form.
Gold and Silver Stock Mining Package
1-26-15 GLD Chart
1-26-15 SLV Chart
1-26-15 GDX Chart
1-26-15 GDXJ Chart
1-26-15 NUGT Chart
1-26-15 JNUG Chart
1-26-15 JDST Chart
1-26-15 DGAZ Chart
1-26-15 UGAZ Chart
1-26-15 TNA Chart
1-26-15 TZA Chart
1-26-15 UWTI Chart
1-26-15 USO Chart
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.