Professor’s Comments January 29, 2014 Inverse Gold

Posted by OMS  at January 29th, 2014

With the Dow off over 100 points, I’m starting to look closely at DUST, the inverse gold ETF.

Most gold stocks have had a nice run during the past few weeks. However the current pattern appears to be part of an Ending Diagonal. While gold stocks are still dominating the Dean’s List, the pattern suggests that it could be nearing completion.

If I’m right about this, gold (the metal) could fall from current levels near 1264 to 1150 or lower.

What I’m gonna do is buy a few shares here near the 29 level, and then add shares based on the hourly bars. If the gold stocks start to drop off the List, I’ll add to these shares.

I don’t want to get too much in front of the of the Fed announcement, but I now feel comfortable about being short a few shares of gold. Any shares that I buy now (inverse) will be a longer term hold.

TWID,

h

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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