So if I want to go long on JNUG why would I think a 20% shellacking in the ETF today was "awesome"? Simple: I got stopped out early and then bought back in near the close. These capitulation sell offs will not last much longer. So what If they get me for 2-3% here and there? That is the price of playing. I sidestepped 16% of that loss via the intelligent use of stop loss orders. In fact, when big moves like that occur it is much better for me than when small ones occur. A small move might take you out and leave you in the ditch bleeding and then rocket higher if you got the count wrong by just one wave.
So with my strategy, small moves are more difficult to protect against but huge slamming collapses like today just make me money because I know that metals are waaaaay oversold, the dollar is waaaaay over bought, and the wave count for both is very close to a sizeable reversal. The JNUG chart clearly completed an ending diagonal today with a nice throwunder. It is not confirmed until it breaks back up into the channel but I think that will happen very early next week. Once it breaks back through the top channel just hang on through the volatility until you see at least an a-b-c count form which should retrace back up to the top of the wedge (~$20). Of course it could also do a larger throw under before reversing so I would stop out again on Monday just below the low of Friday (about $9.30 is a good stop value).
By the way, there are scenarios that take JNUG much higher than $20 but they will require a bit more break down first. So we need to keep an eye on GLD and UUP to see if they will give us clues about a pullback. I see a valid count that would indicate wave 3 up of UUP is complete. Note that I did not show wave 1 in this diagram, everything below is the 5 waves that comprise wave 3 of the dollar ETF with the ticker UUP. When the dollar takes a breather, JNUG should take a moon shot.
No comments:
Post a Comment