| Recommendation:
For every $25,000 in equity you are trading … Buy 100 shares of the Direxion Daily Gold Miners 3X Bear ETF, symbol DUST, at $45.50 or better. Place a protective order to sell 100 shares of DUST at $37.94 stop, good till canceled. |
Dear Member,
Gold and silver remain weak, which is not surprising considering gold has failed to get back above the $1,262 level. And fundamentally, there is not much out there for the bulls to hang their hats on.
Right now I recommend holding all positions. Yes, we have the call options on, but they are long-term. Ditto for the alternate long-term holdings of the SPDR Gold Trust, GLD.
However, if gold closes this Friday below $1,262 yet again, that will be a sure fire sign that gold will head into a late January low down below the $1,100 level. If we get that signal, I will recommend exiting those long positions early net week.
Hold your existing bearish position via DZZ, with your stop in place. But now enter a bearish position on the mining sector again, which remains exceptionally vulnerable to further declines — not only due to the weakness in gold and silver, but also because my models are showing that the stock market is exceptionally overbought and likely to soon correct.
If it does, then the next move down in the mining sector should be a doozy. With a position in the inverse mining ETF, DUST, we should be able to profit nicely.
Go ahead and act on the above recommendation, asap.
Lastly, please note that I am travelling extensively this week, first to the Weiss Money and Markets year-end event in Florida, and then back to Bangkok. I am monitoring the markets very closely, but you may not receive another issue till next week. Naturally, if there is a market move that is critical, I will get an issue out to you even if from the plane. Fortunately, these days I can pick a plane that has internet, even on international flights!
Best wishes,
Larry
