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Good trading all.

Steve Chapman, TRI

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10 comments on Mirage

  1. knight
    April 1, 2014 at 7:32 PM (3 years ago)

    HI Steve, I am a bit confused you are long NUGT but put a stop below 1285 on gold. Gold is below 1285 are you still long NUGTt??

    • Steve Chapman
      April 1, 2014 at 8:01 PM (3 years ago)

      Not everyone is at their computers all day long and so they request a hard stop out point in the comments and emails. If you were stopped out then there is nothing wrong from a risk management perspective. There was nothing magic about $1285, just that it forces you to make a decision on risk and position size.

  2. David Akridge
    April 1, 2014 at 8:07 PM (3 years ago)

    Steve, so far tonight POG bounced off the $1,278 mark and is slowly moving up. I don’t think you exited NUGT and UGLD today when $1,285 was breached. Was that intentional thinking $1,278 provides a base of support for another move higher? If gold continues higher from here, will that mean a DCL occurred today and this is the first day of a new cycle? Thanks, Steve.

    • Steve Chapman
      April 1, 2014 at 8:17 PM (3 years ago)

      I do not believe a daily cycle low has occurred, but I typically don’t like to sell after five straight down days and 10 of 12 down days. How a cycle unfolds can weigh into the decision making process. A stop that is hit after Day 20 is different than a stop that is hit on Day 5, and you also have to consider what the moving averages are doing and the context of the entire intermediate cycle. Overall though, it is hard to deny the bearish implications of this daily cycle.

  3. Chris DeLaney
    April 1, 2014 at 8:25 PM (3 years ago)

    I tend to agree on the PM analysis, wave 1 down still in progress.
    What I worry about is the setup we have at today’s close. It looks like a classic “gap down” setup…. although more so in GDX than gold.

    • Steve Chapman
      April 1, 2014 at 8:58 PM (3 years ago)

      GDX does look like a triangle before a drop, but I have also seen it be a fakeout. It would be nice to get some kind of countermove or capitulation before Friday.

  4. apple
    April 2, 2014 at 2:19 AM (3 years ago)

    Is there a point we it is unwise to stay in our current positions? I assume the latest would be Monday or Tuesday of next week regardless.

    • Steve Chapman
      April 2, 2014 at 5:19 AM (3 years ago)

      If I could have known how deep the decline was going to go before any kind of bounce I would have kept us in our short positions. The recent move down was very strong and I doubt gold can get above the $1320-5 level with the current downward momentum until a true cycle low is in. We might have just seen the end of Wave 3 and are now getting a Wave 4 bounce.

  5. kewl2
    April 2, 2014 at 5:42 AM (3 years ago)

    Steve – to clarify — is your objective to sell the current positions in NUGT/UGLD when you sense that Wave 4 of 1 is approaching the top and then buy back in at the bottom of Wave 5 of 1 in order to ride WAVE 2 up? Just want to get in sync with the game plan…

    • Steve Chapman
      April 2, 2014 at 5:59 AM (3 years ago)

      I would rather not play a countertrend move again now that we know it is countertrend. It think it is prudent to stay on the stronger side, which is once again the bears.