Issue #80
| Recommendation: Per every $25,000 in equity you are trading: Buy 50 shares of VelocityShares 3X Inverse Gold ETN, symbol DGLD, at $78.25 or better. When filled, place a protective order to sell 50 shares of VelocityShares 3X Inverse Gold ETN, symbol DGLD, at $68.99 STOP. This order is good till cancelled. |
Dear Member,
Gold and silver are plunging this morning, with gold falling below initial support at the $1,252 level and silver below $20. This is important. Gold’s rally the other day and its inability to close above $1,262 tells you precisely what I conveyed to you in my last issue: That the metals needed a rally to suck in longs, to gain the energy it needs to head into a 2014 low.
This is also why I often say that nothing is as it seems in the markets. All markets love to fake out the majority of investors and traders. That’s where they get the energy to keep their trends going.
That said, yesterday you should have been able to exit your January 2015 SPDR Gold Shares (GLD) call options at $1.90 or better. In addition, for those of you who purchased the SPDR Gold Shares (GLD) ETF instead of the calls, this morning you will likely be stopped out based on the revised protective sell stop I recommended yesterday at $119.90.
Many subscribers have written in asking me why I decided to exit what were intended to be long-term positions.
The answer is simple: I now have confirmation that gold should plunge to at least $1,029 and possibly much lower, to major support at the $852 level.
Silver should move down to at least $16.43 and as low as $15.18 — as it too heads into the final low for its interim bear market.
Similarly, mining shares, in general, have up to 30% more downside before they bottom.
Bottom line: We want to be bearish heading into 2014, aggressively bearish.
Hence, my new recommendation above: Buy 50 shares of VelocityShares 3X Inverse Gold ETN, symbol DGLD. DGLD is an inverse gold fund leveraged three times to the price of gold.
Go ahead and act on the above recommendation, pronto. Hold all other positions, which include shares in DUST and DZZ.
A close below $1,252 will keep the downside pressure on gold, while a close below $1,232 by tomorrow would be very bearish. In silver, a close below $20 will keep the momentum negative, while a close below $19.51 by tomorrow will be exceptionally bearish.
Stay tuned,
Larry
