Yesterday I got to tell the world about my lousy trade, being short 3x gold miner bull NUGT. Writing a post about it was the easy part. Losing money hand over fist being short my favorite sector for the current environment was the hard part.
Still, I gritted it out and stuck to my guns with one of the “guns” being a sense that the PDAC clown show in Toronto might mark at least a reaction point as it so often does (from down to up or up to down). And aside from the annual early March trade show when a who’s who of the gold mining and gold writer communities get to fluff the public for a few days, the sector was over bought, over loved and as we have been noting (and noting, and noting…) in NFTRH, due to take a breather around this time.
So the thing slammed from deeply red to +14% today (+7% on the trade). This is not a boast because the way this sector works, it could put me right back in Palookaville tomorrow. But for today, I am glad to see it play out. Not so much because I want this speculation to work (well, I do but…) as I want a decline to some firm support areas at which point I will add to my very light positioning, assuming the fundamentals stay on course. Indeed, I actually started a position in GDX at the end of the day. But real support is significantly lower, so I am going to see if I have the guts to keep chewing the nugat for a while.
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