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Fear & Greed Trader
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INDEPENDENT Financial Advisor / Professional Investor- with over 30 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
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  • Gold - What To Do Now  4 comments
    Jul 22, 2013 6:01 PM | about stocks: DZZ

    I have been very vocal on the prospects for the Gold market.

    Recently I have been accused of being a "Perma bear" on the precious metal. However , my previous comments here on SA state my position quite clearly. I became bearish on Gold when Gold in fact entered a 'bear" market.

    The Spike in Gold we saw today was quite impressive and allowed me to scale into a "short" position via the (NYSEARCA:DZZ) a leveraged (2X) ETF

    This ETF tracks well with both the metal and (NYSEARCA:GLD) which I am using to "chart' & track my position.

    I purchased 1/3 of my position today in DZZ at the close today @ 6.45 & will monitor to add to my position as we move forward.

    I will use this as a "short to intermediate" term trade and will employ an "exit" strategy with a 'mental" stop of $5.50 on th DZZ which should equate to a move to 1450 or so for Gold.

    That would equate to approx. a 15% downside risk to the trade or a 7% upward move on Gold to 1450.

    As of now I believe the 1450 - 1500 range on Gold will provide major resistance . If in fact the metal does overtake the 1500 level, it would appear the bull argument that this was a mere correction is correct and my assertion of continued weakness and bear case is wrong.

    I will monitor and update as this trade unfolds.

    Disclosure: I am long DZZ.

    Themes: Gold , GLD Stocks: DZZ
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Comments (4)
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  • Interesting Times
    , contributor
    Comments (11548) | Send Message
     
    @FEAR

     

    Good luck ! ( you are gonna need it ) lol
    22 Jul 2013, 06:15 PM Reply Like
  • CoinsK
    , contributor
    Comments (3528) | Send Message
     
    So being long (DZZ) means you are still shorting Gold. I have used (ZSL) with Silver when the price was too high in 2008 and physical was just coming in the door faster than I was interested in. Why use a leveraged short ETF at this stage of the market ? Seems a little premature unless you are just trading for a day or 2 .
    24 Jul 2013, 06:50 AM Reply Like
  • CoinsK
    , contributor
    Comments (3528) | Send Message
     
    I meant in 2011 sorry for the typo.
    24 Jul 2013, 06:53 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5361) | Send Message
     
    Author’s reply » Coins,

     

    Thanks for the input, as i mentioned its a short to intermediate term trade. Always difficult to be precise , so i am "scaling" into the trade as it unfolds. As of today the initial resistance was broken so I was wrong at that "stopping" point.. (1300-1320) . I'm now looking at 1400 . depending on how gold trades from here i will add to the position there.

     

    The "correlation" with this "etf" is fairly consistent with the actual metal.. This past June when Gold fell 13% to the lows , DZZ appreciated by approx 28% ,or 2x the drop in the metal.

     

    I'll update as it unfolds..
    Happy Investing

     

    24 Jul 2013, 08:47 AM Reply Like
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