Nice close for JNUG. There was a cup and handle breakout on Monday and that should produce some support around 28. Still, I tightened up my stop to 32.50, just below some weaker support. I expect this to get hit, but just in case it wants to jump some more, I'm still in.
Way to many new Bulls in all the chat rooms I hang out in. They thought I was crazy buying JNUG @ 13.01 and now they think I'm crazy for going flat, RSI is a jumping, one of my paid services said to reduce position size for GDXJ, and he has a pretty good track record on his short-term sell signals. Kaplan also thinks a pull-back is possible for GDXJ, so I sold all shares and took a DUST beer money trade. Added some SDS in also, but both positions are small ( Risk Management). I'm also watching the gaps on my HUI chart, and I still think it's possible they will get filled, but becoming less likely. However, I'm not willing to place a heavy short position on the out come.
$HUI - SharpCharts Workbench - StockCharts.com
This move up sure looks like short-covering, and could be about over and we get a pull-back to scare the new Bulls.....but it's all just a guess on my part.
A funny story below from Kaplan that I received today.....Ha...I can't tell ya how many times I have bought or sold just before a major turn. I guess we have all felt that way sometime as traders.
Good trading.
"One of the most reliable indicators has been the opinion of certain emotional traders whom I have gotten to know, some of whom have been calling me on the telephone or emailing me for decades. These folks will nearly always buy or sell near an important turning point--not always a long-term top or bottom, but frequently an intermediate-term high or low. Some more experienced traders with better track records also give useful signals if I count the frequency of their calls or emails; they will send the greatest number of messages about how brilliant they have been just before they make their biggest mistakes. One fellow named Jim last purchased GDXJ and told me about it in late August 2013; not surprisingly, he unloaded it around the middle of December. Jim called me shortly before noon Tuesday to tell me excitedly that he had bought GDXJ again. I haven't sold any of my similar holdings, but if you're the kind of trader who likes to hedge in the short run by selling covered calls or via any other method, this is probably the best time to do so in almost a half year. If you do sell covered calls, only pick those which are out of the money or not more than one strike in the money and which expire in more than 30 days, or else you will invalidate the holding period of your underlying security and you'll have to pay taxes at the high short-term capital gains rate. If you don't have many years of thorough experience with options trading, then ignore this suggestion completely because whatever you do will result in losing money and making a hopeless mess of your account. Also keep in mind that if you sell GDXJ with the idea of buying it back after it drops 10%-15%, then you'll end up paying much more in taxes than you'll save in trading, and create lots of headaches. As a general rule, you have to make a 140% profit taxed as short-term capital gains to equal the profit from a 100% profit taxed at the long-term rate, assuming you live in a state with an income tax averaging 9% as in New Jersey. If you live in Canada where there are no long-term capital gains or you have gold and silver mining shares in retirement accounts, and you've been trading options since you were a callow youth, then good luck with the covered-call idea. If it doesn't work out, remember that I'm not doing anything with my own accounts or the accounts of my clients.
I made a bet with Jim: I have to treat him to dinner at his favorite New Jersey restaurant if GDXJ reaches 46 before reaching 37.75 (which was symmetric in both directions at the time we reached the agreement); if it falls to 37.75 first, then he treats me instead. It's worth noting that on January 23, 2014, when GDXJ was already in what will prove to be a well-established uptrend, it plummeted in less than two trading days from 38.22 to 34.28 which was a rapid correction of 10.3%. Even if GDXJ rallies further before deciding to retreat, a double-digit decline is probably a likely scenario. From October 2008 through July 2009, I continued to accumulate GDX into higher lows (GDXJ didn't exist at that time), with the rule that I would only buy it after it had dropped at least 20% from its most recent peak. I was able to make several purchases during those months, indicating that even for GDX which is less volatile than GDXJ, periodic double-digit declines during a powerful rally are commonplace. Anything which is likely to quadruple, as I expect GDXJ to do from its December 6, 2013 8:30 a.m. pre-market bottom of 28.80 (it later touched 28.82 during regular hours on December 23, 2013), will necessarily have to suffer such retracements as par for the course."
In case you're an emotional trader without decades of experience: leave your holdings intact in gold and silver mining shares, but don't buy any more at the present time. These will still end up doubling or tripling from their current levels by the first half of 2015 and perhaps even sooner, but too many people are getting excited about them in the short run.
