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Gold - What To Do Now

|Includes: DB Gold Double Short ETN (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.