GST Issue #48
| Recommendation:
For every $25,000 you are trading in this service … 1. Buy 200 shares of the Direxion Daily Gold Miners Bear 3X Shrs, symbol DUST, at the market to open. Then enter a protective order to sell 200 shares of DUST, to close at $26.22 STOP, $25.29 LIMIT. This order is good till cancelled. |
Dear Member,
Late yesterday, gold and silver popped a tad higher. Your protective sell stop held in silver, but in gold, you were stopped out of ProShares UltraShort Gold (GLL) for a modest gain of roughly 5.27%, or 1.64% based on $25,000.
This morning, gold and silver are slumping again. That’s not surprising. Both are still caught in downtrends.
In addition, my models are negative on virtually all markets. I am not liking what I am seeing. The metals look very heavy, stocks look like they could bounce a tad, but then roll over to the downside and hard. The euro looks ready to tank. Grains are getting hit hard, and crude oil and natural gas are now under pressure as well. Meanwhile, the dollar is forming a nice base from which it could rally sharply.
The models are tipping me off to some sort of black swan type of event ahead. It could be anything. But most likely it’s the budget debate and debt ceiling that’s rapidly approaching, and the prospects for a resurgence of the euro crisis. Plus, there’s still a chance the Fed may taper its bond purchasing at its next meeting.
But no matter what it is, my models suggest severe disinflation ahead. Temporary, but severe enough to cause damage to several markets.
Strategy: Hold long your position in ProShares UltraShort Silver (ZSL), with your stop limit order in place, good till cancelled.
And now, I recommend you re-enter a position in the inverse miners ETF, Direxion Daily Gold Miners Bear 3X Shrs, symbol DUST, at the market.
Note the stop for the order. First, it’s a bit wider than normal. That’s due to the volatility I expect. Second, it’s a stop limit order, with two prices.
The first price, $26.22, is the price at which the order would become effective, should DUST fall to that level. The second price, $25.29, is the limit price for the order. That means if the stop is triggered, your broker would immediately attempt to sell your shares, but no lower than the limit price.
Virtually all brokers, online and offline, accept this type of stop, so you should have no problems entering it.
Go ahead and act on the above recommendation, and stay tuned.
Best wishes,
Larry
