Gold and mining shares staged a half-hearted bounce off the lows yesterday, but on meager volume. And the metals declined further in overnight electronic trading.
The fact that no buyers are stepping in here – especially Asian buyers in the overnight session – tells me the counter-trend rally in gold and mining shares has likely run its course. The next move will be to the downside over the next several weeks as forecast by the E-Wave cycle.
Gold should find support at the recent lows near $1,260, but it would not surprise me a bit to see a deeper correction down to $1,240-$1,250. And a retest of $1,200 an ounce cannot be ruled out.
That’s why it makes sense to reverse our positioning to take advantage of this correction by taking action on the two trades below …
Here’s what to do right away:
1. Sell to Close ALL my shares of ProShares Ultra Gold Miners ETF, symbol GDXX at market.
2. Using 5% of the trading capital you have set aside for this service, BUY the Direxion Daily Gold Miners Index Bear 3X Shares, symbol DUST at a limit-price of $24.50 or better. This order is good-till-canceled.
DUST aims to deliver 3x the inverse performance of gold mining stocks, which should translate into substantial gains of 20%-30% or more, even with a modest correction in gold. Place these trades right away and hold all other positions.
Good investing,
Mike
P.S. The first installment of The Edelson Institute’s “Supercycle Investment Summit” is TODAY. Attending could not be easier — a few minutes before 2 p.m. Eastern today, simply click this link here.
