In yesterday’s Current Thoughts I wrote “while I still lean for lower lows for gold, it doesn’t mean that we won’t get a bounce now especially since the dollar took a hit today.” Today we did get the bounce but gold still found resistance trading above, below and now above again the $1,270 level. A break above $1,275 tomorrow and I’ll have more confidence in keeping any longs in the mining stocks that might have been triggered today with this move higher.
The weekly and monthly scores for GLD and SLV are still green as well as the daily for SLV so I have to lean bullish for a bit longer. The only way I would trade JDST long is with a higher high, but with stops. Today JDST did have a higher high but you would have been stopped out of it with a 38 cent loss. You might have switched to JNUG at that point though and squeezed 1.19 from it at the high. I said yesterday that we are experiencing some volatility in gold and silver and you have to take profits quicker. Today was no exception and difficult to trade. The final trend though was JNUG up and JDST down. We’ll see if that continues as it has so far after hours.
Somehow in my gut we may take off to break high in gold and silver and then that magic large sell order comes out of nowhere in Asia overnight. It’s happened a few times on very low volume. It makes no sense (except for conspiracy folks), but you have to be aware of it. That’s why I prefer you don’t marry these ETFs, but take profit from them. People can brag about how they made 40% or 50% from holding a highly leveraged ETF, but most traders can’t sit through losing 10% or more when you have the pullbacks. That’s why you move your stops up and when you see patterns where volatility increases, you take profits quicker. The trend will still set up and you can still trade it with a good entry.
The star of the day is unfortunately one I haven’t spoken about which was the opposite of UWTI and that is DWTI which I am now adding to the analysis. We have ridden UWTI up to a 50% or more gain and got stopped out at 3.45 today where I said to exit. It closed at 3.12, a 20.61% loss after hitting a low of 2.93. Now you know why I said yesterday, “don’t get greedy!” UWTI opened at 3.61 and never moved higher really and you would have been wise to get out at 4 or higher the day before with a return of 60% or more.
DWTI, while more expensive and lower volume, could have been played for at least 10 points of profit today. The range was 17 and higher highs came in at just over 119. Even with 100 shares you could have done nicely with this ETF today. It’s hitting some resistance at 131, but over that and then 141 and next 150 are possible. I will repeat, this is a low volume stock and moves can be 4 points in minutes, so keep your stops a little wider and admit you are wrong if it goes against you. DWTI still has some red arrows down for the daily and weekly, but once they turn green, it could be a nice ride as long as you raise your stops and lock in profit.
TNA made a run at 80 again, hitting 79.10 and did what it has done 4 times now, retreated. It lost $1.50 at the close today, ending up at 77.44. After hours it’s down another 77 cents to $76.67. At some point the “buy the dip” trade won’t work for TNA, but I still like it. Just keep a stop if it goes against you. Today was not an easy day to trade it. Volatile times call for quicker profit taking.
RUSS was a nice trade of a higher high today at 20.04. It immediately went up 50 cents then fell again to a break even, but rebounded quickly enough where you could have rode it up to about a 70 cent gain. If you kept a wider stop then you could have held it till end of day and got a $1 from it. It’s up 33 cents after hours so it looks like RUSS will make a move towards 22.26 now. From there next resistance is 23 then 24. RUSL looks like it is once again ready to break 16 and head into the 15’s again and possibly the 14’s. A break below 14 and RUSS is worth a swing trade with moving stops up. Keep an eye on news with Ukraine for clues.
Looks like UGAZ pooped out with the oil fall and DGAZ around 8.03. Because these move slower, it makes sense to take profit on big moves up. The most you would have got from it is about 30 cents though. Still, it closed at 8.25 and I’d still be looking to be long DGAZ especially if the energy sector with oil taking a big hit today continues to falter. Deflation is still blowing in the wind.
Gold and Silver Stock Mining Package
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Doug 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
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