Direxion Daily Gold Miners Bull 2X (NUGT)

[mannken]

Most would assume

My short term concern is momentum of the dollar.

Unless there is a big catalyst that catches the market off guard, I wouldn't be surprised to see Nugt in the 18's going into this week.

The most recent time there was 10m+ 'down volume days' on Nugt was on 2Dec2013 & 4Dec2013.

--Nugt gave up a several more downside points a day after 2Dec2013.

--Nugt consolidated 4 days after 4Dec2013 before an upside 'oversold' spike occurred of 4 points.

--It took roughly 3 weeks for the bottom to form before the trend reversed up for a big run.

On the flip side, the strong dollar could offset Q1 earnings on multinationals, I would suspect markets will start to price that in by scaling back on holdings well before Q1 arrives, but not before the dollar momentum subsides a little.

So, if history is any indication, Nugt high teens could prove to be a short term bottom for an oversold, short lived bounce correction, but a true trend reversal could take roughly 3 weeks of bottoming choppiness.

This could possibly coincide with multinationals giving Q1 pre-earning warnings as a result of the stronger dollar.

From Monday, my trade plan is a continuation of Nugt long scale until there is a sharp oversold bounce, then exit Nugt on any substantial bounce, stay in cash until technicals provide a continuation trend reversal.

If I were a day trader with these ETF's, I would go long Dust Monday and try to squeeze a few more upside points, possibly even to 35 on momentum alone.

Since I do not day trade these, there is too much risk long Dust in the next month vs. Nugt IMO. I could very well be wrong!