JNUG update

On Friday I held JNUG over the weekend but with the proviso that it either popped up at the open or I would get stopped out very quickly (stops were set at $2.59).  Of course, this AM I got stopped out immediately on the gap down to $2.43.

Over the weekend I had another look at the gold chart and expressed some concerns about the shape of it.  In fact, I wrote:

I suggest keeping the following things in mind for next week:

1. These leveraged ETFs often have a habit of bottoming in the low to mid $2 range.  TVIX eventually fell to $2 and JNUG could as well.

Because of this, I waited until $2.17 to get back in but even that proved to be ambitious.  They took it all the way down to $2 into the close but I saw this as a capitulation move and decided to cancel my stop before they took me out. They would have done so had I left the stop in place but since the damage was already done I decided to hold my new position over night again tonight. I will be quick to let it go tomorrow AM if we do not move back up very near the open.


In any case the potential for a final capitulation bottom certainly existed in my mind and today's JNUG drubbing might have been just that.  Still, GLD has not fallen to Avi's target yet and JNUG closed the day right at $2.  I don't know much but I do know that if they let JNUG go very much lower then too many people are going to be able to get in at this ridiculous level before the next pop goes off (and it certainly will pop again at some point...).  Those who have been shorting gold and miners will have to unwind at some point and the juniors are compressed super springs waiting to be released.  There will be little controlling them when they do decide to move. 

In any case, here is the updated JNUG model which now has a much more credible 5 wave movement to the 4th wave down.

A break back up through that orange trend line will be the first sign that the trend has changed upward.

Note for those who lost money on JNUG today like I did:

I lost a good deal of money today speculating on JNUG using an incorrect wave count.  It happens.  But I limited my loss to faaar less than a "buy and hold" person because I use stops.  As a result, I will actually ended up with slightly more shares in my account at the close than I did at the open.  So while the dollar figures are lower in my account, the share count is actually higher.  When this turns around (and it will turn around!), this is going to skyrocket my account value.  I'll continue to use stops and I will continue to be very happen if when I do get stopped out the shares subsequently step into an open elevator shaft like JNUG did today.  One comment today was the JNUG was disappointing.  I can understand that point of view but I personally view it as a net positive even though my account value took a hit from being overweight JNUG today simply because my stops saved me from eating the full loss.

Time will tell when this begins to move up again but the chart was ready to start moving back up anytime and now we have the Russian bombshell of moving their interest rates to 17%.  Tomorrow should be a very interesting day in M+M!