From today's closing
If Nugt bounces to 44.50 area, about +2.5%, puts Dust about 15.70
I'll be looking for entries in the 15.50/70 area tomorrow if it comes about.
The 10/20 & 50 E/S MA's are converging on a major vector, this occurred on 6/19 (cross above) when Nugt gaped from 38 to 40 and ran to its 7/10 high of 53, this also occurred (cross below) back in March which eventually took Nugt down to 27. Nugt 45.35/55 is key area to watch imo for the big death cross - if it fails to extend beyond it.
I do expect choppiness and intend on position-building based on MA developments. I strongly believe Nugt is heading back to the low 30's in the next few months, but always remain flexible to react when being wrong, rather than being predicatively stubborn.
I couple all this with bearish macro factors for Gold (IMO) which will drag on the miners, adversely impacting Nugt performance.
I also think Gold is heading below 1200 oz, possibly to 1000-1100 for the following reasons:
Higher interest rates potential - Cost of Gold production goes up
Dollar continues to strengthen against other weakening economies
Inflation remains low relative to Fed targets
Anti-Gold import policies from substantial consumers such as India
Bonds overshadow Gold in safe haven plays as suggested in financial commentary
Seasonal - Historically, Aug and the front end of Sept have been the best perf. for Gold which is nearing the end of cycle
Sure there are bullish arguments for Gold, such as geo-political tensions, insurmountable US debt and the Fed printing money, but I don't think any of this will come into play for an explosive gold run as long as the bull equity markets continue to dominate.
