If $6 will be psych resistance then the a-b-c would be back to fill the gap @ $5 or just below to the 38.2 fib in the $4.70 range. But what you do NOT want to do is buy here, have it lose a quick 20-25% on you and then you panic and bail at the bottom. If you decide to buy here you will eventually be a big winner but the journey will not be straight up. That is why I think that most people will be best of if they wait for a dip to buy.
Of course, none of this is investing advice. I don't give free advice. If we are in a paid relationship, only then is it advice.
Captain would you sell here if you bought in at 3.95
ReplyDeleteAnon, It is not important what I would do but rather what you would do; we could be very different in our thinking (risk tolerance, eye for multiple variables, amount of time we invest, etc.).
ReplyDeleteNear the trend change there are lots of conflicting variables and indicators in play. On one hand GLD (and thus miners) have taken a massive if not historical beating since 2011. At its current low so far of $2.83, JNUG hit close to my rule of thumb target of mid to low 2s. Volume went exponential in a clear panic. These are all signs of bottoming.
On the other hand, GLD chart looks like it could still be in a falling wedge and it did not hit the price window of Avi. Also GLD closed with a DDT today after putting in a rising wedge that I count as a C wave.
Since there is a difference between "bottoming at these prices" and "has bottomed and will not go lower any time soon", I'm still trading until I get a strong feeling of the latter. Because of that, I sold JNUG into the close.
But I will be watching tomorrow AM pretrade and if it's going higher instead of playing off the closing DDT then I think it is telling me that the rising wedge might end up getting negated which would make it a strong buy. It literally is balancing on a TA knife blade IMO.
In general, as I posted before, I think most people should generally be more afraid of losing 400,500,600% gains or more by being out of JNUG right now than racking up short term paper losses of even 50%. I know this kind of volatility is hard to take! If it were easy then it would not have its intended purpose of shaking off all but the conviction buyers - those who are in the issue for a reason and who know what they are doing and why they are doing it. I'm a bit more nimble than most and so for now I'm going to trade it but once it confirms to me that it has broken out I will be less inclined to trade. This could come at any time in the form of an overnight gap up to ensure that traders who went to the sidelines overnight like me don't get paid so there is definite risk in not holding.
So what are you, short term or even day trader or conviction buyer? That will determine what you do. But for sure I think buy and hold here is a good strategy for most people as long as they can take the ridiculous mind bending volatility of these leveraged ETFs.
The full truth is that today I piled all of my recent gains on JNUG into TVIX because the chart of $COMPX just seems so tired and I count a full 5 waves up now. I have tight stops on it given the amount of money I have in that trade right now.