Stocks are sinking fast as rising tensions between the U.S. and North Korea take center stage, with the threat of a pre-emptive military strike in the air.
The Dow sank another 200+ points yesterday, and the S&P 500 fell nearly 1.5%. This is good news for your ProShares UltraShort Dow 30 (DXD) and your ProShares UltraShort S&P500 (SDS).
As a result, the dollar is getting an added boost from safe-haven money flows at the expense of the yen and euro.
Also, this morning’s read on July consumer prices missed expectations for the fifth-consecutive month. This further reduces the odds of a Fed rate hike.
And that put December gold on path for $1,300 before backing off at the time of writing.
There’s thick resistance in gold futures from $1,300 to $1,307, provided by the April and June peaks. This offers a formidable challenge.
Where’s the opportunity?
This week’s rally in gold and mining shares gives us higher prices, just as we expected, to exit our precious metals ETFs. Remember, our E-Wave forecast calls for a cycle high in precious metals and mining shares in the coming week. And we want to side-step that next decline.
That’s why we recommend placing a limit order above the market to exit your Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) to take advantage of an extension of this rally in metals and miners.
Here’s what to do:
| Place an order to SELL ALL my remaining shares of the Direxion Daily Junior Gold Miners Index Bull 3x Shares, symbol JNUG, at $18.88 or better, to close. This order is good-till-canceled.
Then IF AND ONLY IF my sell order is filled, CANCEL my order to SELL ALL my remaining shares of the Direxion Daily Junior Gold Miners Index Bull 3x Shares, symbol JNUG, at $14.46, STOP. |
But there’s more…
While July U.S. inflation figures fell short of estimates, higher commodity prices over the last six to eight weeks suggests inflation is stabilizing.
This view was reiterated by New York Fed President William Dudley yesterday. He pointed to a moderate growth trend, and tighter labor markets triggering an uptick in inflation over the medium term.
Plus, a more-hawkish Fed — combined with a severely oversold U.S. dollar, and record bullish bets on the euro currency — points to a sharp reversal for the euro dead-ahead.
To take advantage of it, now is the time to add another 2.5% allocation to ProShares UltraShort Euro (EUO).
Here’s what we recommend:
| Using 2.5% of the funds you have allocated to this service, BUY ProShares UltraShort Euro, symbol EUO, at the market, to open. |
This move brings your total allocation to 5%.
In the meantime, we’ll monitor risk on the position for you.
Volatility’s back and markets are moving quickly. Get these orders in to your broker right away. Hold all other positions and stay tuned for new trading alerts and updates coming your way very soon.
Good investing,
Mike and David
