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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • All NUGT Traders Can Do Now Is Stand Pat While Repositioning 14 comments
    Oct 1, 2013 9:17 AM | about stocks: GLD, NUGT, DUST, GDX

    Early this morning, October 1, 2013, gold hit over 1337 (up $10) and was in low 1330s at 7 a.m. NY time. NUGT was $51.90 up $1.64. Then gold fell to 1323 & NUGT $50. Gold ran stops under 1319, trading down to 1315, NUGT fell to $49. In Stock Talk, I did a running commentary, as gold broke down to 1300 and ultimately stopped at 1284.30 before bouncing. I bought gold today 1325, 1316, and caught a contract at 1289, that I sold out at 1296 for a small profit. I bought NUGT as low as $47.50 but it is now under $46. I have seen better days. What a contrast to yesterday!

    Well, with today's action, the stops have been run below 1319 and 1300 in gold, so the bears can declare victory on that score. There should be good support in gold between 1275 and 1280. But of course it may not stop at support. Who knows where the bottom is at this point. What I do know is that the next rally point in both gold and NUGT, should be much higher than where we are now, and I must stand pat and wait for better prices. The only mistake I could make now is to panic.

    I was looking for an up week in gold when this week started and I am still looking for an up week in gold for this week. It is not out of the realm of possibilities. The Australian Dollar caught a bid overnight and the U.S. Dollar is weaker so there is no reason for gold to be going down except to make small traders give up and take their losses. I still believe that under $25 in GDX and under $50 in NUGT are "crazy cheap prices" and in the future we will find out how crazy cheap these prices were. I don't know where the bottom is on this current move, but I will be holding the shares I own to give myself every opportunity to make a profit. I will sell out half my position on rallies, even if it is at a loss, if I am confident I can buy back lower. I will aggressively trade today, tomorrow, this week, next week, as long as it takes to not only get my money back but to turn this "dog" into a profit.

    I know if I trade DUST or NUGT, I will be tested often. I will face adversity. It is a given. How I handle myself in the face of adversity, will determine if I am a winner, or a loser. I may ultimately lose, but it will not be for lack of determination & effort. I will leave it all on the battlefield. When you have done all you can do.....sometimes you just have to stand.....stand pat. I plan to stand on my position while trading aggressively to reduce my price whenever and wherever I can. Soldier on!

    Disclosure: I am long NUGT.

    Stocks: GLD, NUGT, DUST, GDX
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Comments (14)
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  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » When we bottomed in NUGT $47.45 last week, we were able to rally to $56, a gain of $8.55, or 18% off the low. If GDX stops falling at 24, then NUGT should stop falling around 44.50 area. If we get an 18% rally off of that low, it brings us back to $52.51 for the next swing high target. If we rally $8.55 off of the low, then we could see $53
    1 Oct 2013, 11:15 AM Reply Like
  • wapiti
    , contributor
    Comments (698) | Send Message
     
    Great artilcle
    1 Oct 2013, 12:04 PM Reply Like
  • gaklaw
    , contributor
    Comments (6) | Send Message
     
    Thanks for the update! Averaging down with you....
    1 Oct 2013, 07:16 PM Reply Like
  • Rain Man 1
    , contributor
    Comments (5) | Send Message
     
    I must say I was surprised to see such a drip in gold, GDX and therefore NUGT. I am averaged in at close to $52. I'm trying not to panic. Cutting through everything the US is not going to quit spending anytime soon and China is about to surpass India as the largest gold importer. central banks are loading up on gold. The decay in the 3x etf concerns me more than anything. If the debt ceiling doesn't get raise gold should rise, and if the debt ceiling does raise it just means more borrowing.
    1 Oct 2013, 07:16 PM Reply Like
  • justin.zhou10
    , contributor
    Comments (159) | Send Message
     
    I will be careful this whole week. Although got in nugt at 45.79, I still got out for a small profit. The gold technical is really bearish. I will wait until 1271 holds before committing to an overnight position.
    1 Oct 2013, 10:05 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » I just posted warning on Stock Talk to exit half your position on this strength in NUGT from 49.50 to 50. So far 50 is high of day. Chart damage done in gold's move under 1300 and NUGT move under 47.45 makes further dips in both quite likely so be careful, play small, and space out buys to allow for buying NUGT as low as 40 if it goes that low.
    2 Oct 2013, 11:11 AM Reply Like
  • tfinavia
    , contributor
    Comments (8) | Send Message
     
    Robert, Thanks for updating, keep up the good work! The earlier analysis of 7 weeks of uptrend is still in place and potentially in cards? Thanks again!
    2 Oct 2013, 10:44 PM Reply Like
  • tfinavia
    , contributor
    Comments (8) | Send Message
     
    Robert, Thanks for updates and keep up the good work! The earlier projection of 7 up weeks still good and in cards? Thanks again.
    2 Oct 2013, 10:44 PM Reply Like
  • AdrienneND
    , contributor
    Comments (12) | Send Message
     
    I've read your blogs about trading ETF's and I believe your stance is to not keep them for more than 1 week. Back in July (approximately), I held onto NUGT for about 3 weeks and made a nice profit. I currently hold shares at 51 and 52. I'm hoping to watch NUGT and the GDX rally and am willing to hold for another couple of weeks. Do you consider this a "crazy" move?
    2 Oct 2013, 11:03 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » Only one week is ideal but ETFs can be held longer for sure. But holding a month will result in slippage of about 10% so the first 3 1/3% gain in GDX (85 cents) will be wasted trying to recover the 10% slippage in NUGT. Not prohibitive, but significant none the less.
    3 Oct 2013, 05:27 AM Reply Like
  • jsingh188
    , contributor
    Comments (2) | Send Message
     
    Bought NUGT ETF for the first time last month at $85.. Held it like a moron and it's now at HALF that price! Keep it until it goes up or just sell it off? (Learned my lesson with leveraged ETF's and not to hold for too long I guess)
    11 Oct 2013, 08:08 AM Reply Like
  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » No guarantees here, but if you check out my latest article, you will see how there is a very high probability that the worst case scenario for NUGT low is 30, and hopefully something closer to 35 to 39. It that is true, then the target for NUGT on a rally is 60 to 80. Once NUGT bottoms, it should double on a rally. If it falls to 30, it should hit 60 or higher. If 39.13 hit recently is the low, then 80 to maybe 85 is the high. So you have to decide if you want to risk a move to 30, for the chance of getting out at 50, 60, 70, 80 or higher. That is your choice. We are now around 42, so you have already suffered most of the pain. Hope this is helpful.
    11 Oct 2013, 08:26 AM Reply Like
  • jsingh188
    , contributor
    Comments (2) | Send Message
     
    Looks like you were right Robert! NUGT is at about $55 right now.. I got it at 85. Keep it? Sell it? Buy more? My best guess is just sell it and move on to more stable ETF's and keep these types just for day trading..
    30 Oct 2013, 01:36 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » Hello J, we did get just a few pennies shy of $60 ($59.87), and have since sold off a bit in NUGT. Yesterday's low was $48.86, but we bounced back to close $55.16. I wish you had taken advantage of the great close and gotten out, as we are much lower this morning. Yes, the tide has turned so the sooner you exit, it probably better. In the future when you see you are wrong, get out and change course. The sooner, the better. I have recovered from horrific losses. You can too. Just get into a good trade and stop fighting a loser. Wish you well.
    31 Oct 2013, 04:51 AM Reply Like
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