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Lejun James Shao is the founder of (, WhitePine Investment Inc of USA, and CEO of WhitePine Software Inc, Beijing, China. He was the top finisher in MSN's 1st US One Million Dollar Investment Contest, "Strategy Open Tournament," with a +45.88%... More
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  • GLD - Magic Numbers & A History Repeat

    In my previous article, I draw a daily chart showing the magic number 13. Since its latest run, gold price has dropped 13 days.

    But I believed that it may take another 7 days for the gold to start its run. But it did not.

    Instead, gold price broke out today. It looks like gold had a different pattern, no base building stage ths time.

    But if one looks at gold miner ETF, the bas building pattern showed it clearly. Below is GDX 60-minute chart, which showed exactly the same pattern: run before a base building stage:

    (click to enlarge)

    Tags: GDX, GLD, gold miners
    Sep 16 10:30 PM | Link | 4 Comments
  • Gold - Have We Seen The Bottom?

    Gold price has dropped three weeks in a row and is entering 1,080-1,100 area again.

    But I still do not buy the claim that the gold is bottomed now.

    Look at gold daily chart below:

    (click to enlarge)


    1. Gold price bounced from 1,098 low and closed at 1,107.9 last Friday. It touched its bottom of the BB line last Friday, a sign of possible bottom.

    2. But both RSI and MACD are still trending down now up.

    3. This drop lasted 13 days now, a magic number. During its previous drop, the down trend lasted 21 days or 13x1.618 = 21 days.

    4. It is my belief that the down move will be a repeat of last drops: last 21 days and we have 7 more days to go.

    6. We may see new lows for both gold and GDX during the process: gold 1,064 level and GDX 12.00 level.

    7. It is Fed meeting week. Gold cannot go up big before meeting result comes out. The final down move will be seen after Fed meeting result announcement.

    8. No matter whether Fed will increase its interest rate this Thursday, gold will change its trend next week as the gold now already priced in the possible Fed rate increase.

    9. If Fed does increase its interest rate, gold will have a relief rally. The rally may be a long term one as gold and Fed Fund interest rate historically have long term positive correlation.

    10. If Fed does not increase the rate, gold price will also rally. The reason is simple: recent gold price drop is purely due to possible rate increase. If rate does not raise, gold will go back to where it was before the drop.

    Sep 14 1:08 AM | Link | 2 Comments
  • How To Make A Double Trading 3xleveraged Gold Miner ETF In A Week

    In Constant Search for Chart Patterns used in Program Trading

    Gold miner stocks were in a free fall last week. Both GDX and GDXJ was down big last week.

    GDX lost 6.03% and closed at 13.39.

    GDXJ fell 5.03% and closed at 19.45.

    It is not surprising to see 3xbear gold miner ETFs - DUST and JDST made a big run last week, gained 18.50% and 15.54% respectively.

    But using the buy/sell signals generated from the pattern recognition system, trading DUST and JDST can give us over 100% return in a week shown in the tables below:


    gain amt - the profit if $50,000 capital is used for each trade and no compounding.

    3xbear gold miner ETF - JNUG and NUGT were both down big for the week. But using the same pattern recognition system, trading them can still give us near 100% return. See table below for buy/sell signals generated for JNUG:

    Where gold miners will go next?

    Gold is short term oversold and should bounce back this week. GDX is going to find strong support on its year low level.

    GDX - Its last Friday's low was 13.06. Previous two year lows were 13.01 on August 5 and 12.96 on August 26.

    Will we see a break-down on gold miners this week?

    The answer is - I don't know.

    No matter what happens next, I will continue using the current pattern to trade 3xleveraged gold miner ETF as long as the current pattern is still valid.

    From trading perspective, I need a system which can give me buy/sell signals using which can result in consistent trading profit.

    One thing is certain that the chart pattern keeps changing.

    In my previous article, I showed how trading JNUG can make a double in three weeks following the pattern I detected

    I also predicted in that article that

    "The chart showed an ascending triangle bullish pattern. Once it breaks out $22.00 strong resistance, we may see $29-$30 in another three weeks and we may make another double in the following three weeks."

    JNUG did make a following three weeks run and topped at $27.60 on May 14, short of my 29-30 target.

    That is, even the JNUG already gained 100% up to April 22, the pattern was still valid until three weeks later. Trading JNUG using the same pattern could make another double.

    That pattern is no longer valid now.

    How to detect the chart patterns:

    Using a chart pattern database, which stores hundreds of patterns.

    The software system can do a pattern match to see which one fits the best.

    Please be noted, the above tables just list the signals generated by using a chart pattern recognition system last week, not my real trading result.

    I did have made few trades using the signals and made some profit last week. But due to other better trading opportunities I did not follow it all the time.

    UVIX and DWTI was the trade of the week for me. UVIX almost doubled by buy-and-hold last week.

    Sep 06 1:10 AM | Link | 8 Comments
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  • long on SCO and RUSS and will put stop-loss on SCO at 60.00. RUSS at 11.30. I am betting that oil price will drop Tuesday or Wednesday.
    Feb 16, 2015
  • $GLD topped on 1/22 and is now moving down slowly.
    Feb 5, 2015
  • $RUSS and $RUSL are good pair for short term trading.
    Feb 5, 2015
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