DUST 15 min Jan 20th
DUST could provide a quick trade for those interested in attempting to profit from or hedge against a pullback in the miners. DUST is the 3x leveraged short (bearish) ETF for the gold mining sector and should the miners pullback over the next few days as I suspect, DUST could either provide for a quick, leveraged pure-play on a pullback in the miners or used as a hedge against GDX and/or individual mining positions.
Of course, one could short GDX directly and not worry about the decay as the 3x leveraged DUST is best used only for very short-term trades lasting a few days or less. As stated earlier today, my preferred pullback target for GDX is the 22 area. My current preferred target on DUST is 13.75 with a sell limit about 20 cents below that, as I suspect GDX(DUST) may reverse just above(below) support(resistance), and a stop set just a few cents below today’s LOD of 11.21. With DUST currently trading around 11.80, that gives this trade a fairly attractive R/R of about 4.3:1.