ANSWER TO QUESTIONS ON PRECIOUS METAL MINER ETFS $DUST AND $NUGT, $ABX $CDE $HMY $SLW $SLV $PSLV $GDX $GDXJ $GLD

ANSWER TO QUESTIONS ON PRECIOUS METAL MINER ETFS $DUST AND $NUGT, $ABX $CDE $HMY $SLW $SLV $PSLV $GDX $GDXJ $GLD

This post was just published on ZYX Buy Change Alert.

This morning we have received many questions on DUST.  DUST is a triple leveraged inverse precious metal miner ETF.  We have given trades on DUST in this service before.

As a full disclosure, there are substantial precious metal short positions in ZYX Short Sell Change Alert including ABX, CDE, HMY, SLW, SLV, and PSLV that are hedged with GDX.  There is a long-term core position in ZYX Global Multi Asset Allocation Alert using ETF GLD.

Further we provide separate CURRENT GOLD AND SILVER RATINGS, AND ALLOCATION. For those who are inclined to always have gold in their portfolio, a long allocation of 2 – 4% to precious metals from a very long-term perspective at this time is recommended.

Our medium-term rating on gold is Negative but very long-term rating is Positive.

It is important that investors invest or trade in gold while taking into account their time frame.

The following points provide the answers.

  • It is true that this morning our system provided a buy signal on DUST but the signal was not published in this service because the high risk involved did not meet our strict criteria.
  • Precious metal stocks can easily move 10- 15% a day.  DUST, being triple leveraged, can easily move 30 – 45% in a day.
  • The large move in DUST can be on either side, posing large risk if the call is wrong.
  • Ultimately precious metal stocks are driven by the price of gold. Gold is trading at $1319 as of this writing.  There is an extremely strong support zone nearby at $1295 to $1313.
  • If gold bounces from the support level, DUST can reverse very quickly.
  • It is common with DUST to gap down in a manner that stop limits do not fill causing huge losses.
  • The key to gold price at this time is the employment report to be released on Friday. If Non-farm Private Payroll number is greater than 250K, gold is likely to break the support zone.  On the other hand if the number is less than 150K, gold may rocket to $1400.
  • The employment report is released at 8:30 am ET when there is very little liquidity in DUST to get out before a huge loss.
  • Starting tomorrow, the rumor mill will be in full gear regarding the employment number.  DUST will move on rumors causing a lot of choppiness.
  • If the stock market starts going down, gold can move up causing significant losses in a long DUST position.
  • There is a strong correlation between DUST and dollar.  Dollar is at a heavy resistance.  If there is a reversal in dollar, it can cause heavy losses in DUST.

Take Away

The take away is that to be successful over the long term, investors need to consider both risk and reward.  Here is an example of the system issuing a buy signal this morning based on potential reward but it was not prudent to take the trade because of the high risk.

Similar reasoning often applies to NUGT.

For most investors it is best to stick to ETFs GDX and GDXJ.

A common mistake those with less experience make is to look at the charts in hind sight and use the observation to justify not taking risk into account.

You are receiving less than 2% of the content from our paid services …TO RECEIVE REMAINING 98%, TAKE A FREE TRIAL TO PAID SERVICES.

Please click here to take advantage of a FREE  30 day trial.

Check out our enviable performance in both bull and bear markets.

FREE: SUBSCRIBE TO ‘GENERATE WEALTH’ NEWSLETTER

Related Posts

WILL TRUMP’S LACK OF LEADERSHIP BECOME AN EXCUSE FOR A BIG SELLOFF IN STOCKS? $GS $AMAT $BABA $WMT $ROST $SPY $GLD

In my 30-plus years in the markets, I have learned that overbought markets are always vulnerable. Overbought markets look for an ...

WEEKLY MARKET DIGEST: IMPLICATIONS OF N. KOREA FOR STOCKS, GOLD, BONDS AND CURRENCIES; LOWER OIL DEMAND $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

HOW HIGH CAN GOLD GO? $GLD $NUGT $DUST $GC_F $GDX $GDXJ $SLV

When the news hit that North Korea had succeeded at miniaturizing a nuclear warhead, I gave a call to buy ...

GOLD KEY SUPPORT RESISTANCE ZONES AND MONEY FLOWS $GLD $SLV $GDX $GDXJ $NUGT $DUST

This post was just published on ZYX Buy Change Alert. The Arora Report provides eight types of information on gold, silver, miners and other ...

BE FOREWARNED IF YOU ARE CHASING DIVIDENDS $TEVA $MYL $PRGO $RDY $ABX $MCK $CAH $ESRX

  Dividend-chasing is in vogue. Given low interest rates, many investors say they have no other choice. Such thinking leads to costly ...

WEEKLY MARKET DIGEST: PREPARE FOR POTENTIAL FRONT RUNNING OF SEPTEMBER IN AUGUST, GOLD SOLD $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

WHAT COULD PUSH STOCKS EVEN HIGHER? TRUMP’S LATEST IDEA $AAPL $GLD $SLV $DUST $SPY $YM_F $PFE $GOOG $FB $SHOP

In my 30-plus years in the markets, I can safely say that most popular analysis methods do not work well. ...

WEEKLY MARKET DIGEST: MOMO CROWDS’ STOPS HUNTED AND DESTROYED, GOLD RUNS ON GDP $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

TANKING STOCKS, GOLD TO $2000 AND SILVER TO $30 ON THIS NEW SCENARIO $GLD $SLV $GDX $EEM $EPI $IWM $QQQ $SPY $GDXJ $UUP $UDN $INDY $INDA

Prudent investors stay alert to various potential scenarios, including those that are long shots in advance. This way they are ...

SIGNAL QUALITATIVE: GOLD KEY SUPPORT RESISTANCE ZONES AND MONEY FLOWS

This post was recently published on ZYX Buy Change Alert. Signal(s) that give high probability risk adjusted direction helping you to choose your own ...

WEEKLY MARKET DIGEST: DOLLAR DROP LEADS TO GOLD RISE ON MUELLER CROSSING TRUMP’S RED LINE, STOCKS DON’T CARE $DIA $GLD $QQQ $SLV $SPY $TBT $TBF $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

‘MOMENTUM’ INVESTORS BUY STOCKS EVEN THOUGH GOLD AND BONDS ARE WARNING THEM $SPY $GLD $T $VZ $DUST $NUGT $GDX $SLV $UUD $UUP $QQQ $IWM

Sophisticated investors closely follow economic data. But I’ve noticed that some lesser-experienced investors don’t do the same. They should. Because ...

WEEKLY MARKET DIGEST: NO IMMEDIATE DANGER FROM FED UNWINDING, PROBLEMS IN 2019, PLAN TO MAKE MONEY FROM UNWINDING $DIA $GLD $QQQ $SLV $SPY $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

STOCKS COULD CRASH IF THE FED’S YELLEN CAN’T PERFORM A MIRACLE $SPY $QQQ $IWM $GLD $SLV $GDX $TBF $TBT $TLT

Investors have bought into what some bankers have been calling the “immaculate conception” thought up by a group of humans ...

A NEW FEAR OF TRUMP IMPEACHMENT COULD MOVE STOCKS, BONDS AND GOLD $GLD $NVDA $AMZN $TSLA $AAPL $QQQ $SPY $IWM $TLT $SLV $GOOG $FB $NFLX

Successful investors make money by preparing for scenarios without letting their politics cloud their judgement. That’s a difficult task, especially ...

TAKE MORE PARTIAL PROFITS ON INVERSE GOLD MINER ETF DUST AND RAISE STOPS ON THE REST $DUST $GLD $NUGT $SLV

This post was just published on ZYX Buy Change Alert.  Inverse gold miner ETF DUST was recently purchased for a short-term trade at ...

WEEKLY MARKET DIGEST: FED SPLIT, SILVER FLASH CRASH, LIBYA HURTS OIL, N. KOREA NUCLEAR THREAT $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

ARE BEARISH PUNTERS REALLY GETTING AHOLD OF GOLD? $GLD $SLV $DUST $NUGT $GDX $GDXJ

BEAR OPERATIORS TIGHTEN GRIP ON GOLD, SILVER Punters have tightened their grip on gold and silver, whose prices have been falling ...

WEEKLY MARKET DIGEST: INVESTORS BUY BANKS AS CENTRAL BANKERS HAWKISH, GOLD PREMIUMS JUMP IN INDIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

TAKE PARTIAL PROFITS ON INVERSE GOLD MINER ETF DUST AND MOVE STOPS ON THE REST TO BREAK EVEN $DUST $GLD $NUGT $SLV

This post was just published on ZYX Buy Change Alert.  DUST is a triple leveraged inverse gold miner ETF that goes up when ...

Follow

Get every new post delivered to your Inbox

Join other followers