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Shorting Gold Miners (GDX) via DUST long

DUST (3x short gold miners ETF) will be added as an aggressive long entry (a proxy for a GDX short) with a stop on a 60-minute close above 14.80 (GDX) and a sole profit target at this time of 14.27 (GDX). I may possibly extend this trade & I'm using the GDX charts to define my stops and targets as the charts of the 3x leveraged ETFs are usually skewed as as result of the price decay. (note: please disregard the two lower price targets, T1 & T2. An additional downside target just above the 13.80 level might be added to this trade but 14.27 (GDX) is the sole profit target at this time).

GDX 15-minute Feb 1st

GDX 15-minute Feb 1st

To reiterate, this is an aggressive, counter-trend trade. A trader should pass on trades that do not mesh with their own risk tolerance, trading style or objectives. Also remember to make the proper beta-adjustment to your position size in order to account for the 3x leverage, if trading DUST. GDX (1x, non-leveraged gold miners ETF) can also be shorted in lieu of a DUST long.

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Feb 1, 2016 11:10am|Categories: Completed Trades - Short, Gold & Commodities|Tags: , |6 Comments

6 Comments

  1. david k February 1, 2016 12:24 pm at 12:24 pm

    Pretty shallow pullback you are expecting. Would prefer to see it get down to the 13.81 target!

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  2. rsotc February 1, 2016 12:37 pm at 12:37 pm

    david- I may very well extend the trade to the 13.80 GDX level but should mention that there is also some minor resistance on GDX around 14 that could come into play. Will update the trade as it goes. Also keep in mind that a move in GDX from 14.56 down to 14.27, which is likely to be hit today, would correlate to nearly a 6% gain in DUST. I took an over-sized (day trade sized) position with the intention of peeling a good part of it off today either if/when 14.27 is hit or before the close, likely bringing home a modest swing (overnight) position.

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  3. snp February 1, 2016 3:25 pm at 3:25 pm

    do you think the TL down from 21.25 is too steep to be valid?

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  4. rsotc February 1, 2016 3:39 pm at 3:39 pm

    snp- I assume you mean the downtrend line on DUST? If so, while it may appear too steep to be valid when viewed on the daily time frame, it is my ideal setup when viewed on the intraday charts. In fact, it makes up the top of this bullish falling wedge on the DUST 15 minute chart. The uptrends & downtrends in DUST are so powerful that if you take a look at the daily chart going back a couple of years, you’ll see that the steep slope of the downtrend line that you mention is extremely typical with DUST, hence, the reason I’ll focus on the intraday charts often when trading the miners.

    DUST 15-minute Feb 1st

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    • snp February 1, 2016 10:52 pm at 10:52 pm

      im sorry I didn’t say. I meant GDX. seems slightly bullish looked at on daily.

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  5. rsotc February 1, 2016 3:41 pm at 3:41 pm

    Here’s the embedded 15-minute chart of DUST which is posted in that link in the previous reply:

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