lol, yea, that is the point. A good pump starts to make people question if the up move will even end. It is very important that it gets driven so that it APPEARS that it will never end because charts and fundamentals don't support any more of an up move and actually support a down move so the pumping is key to keep the buying going.
I'm in a good position. I will be OK. Once I figured out what was really happening I moved to a more cautious position.
Miners do have massive runs but even in their hay day they still have selloffs and corrections and pretty sizable ones at that. Even when in a bull cycle.
DUST and JDST are pinched and they will get a run to relieve their pinch eventually. At minimum they will need to break and hold past their 20 day moving averages for at least a couple of days to relieve their pinches. Since they are longnecks I would look for at least the 50 day moving average or 100 day though because longenecks get better runs. Some longnecks even get the 200 day moving average once they run.
As I said the problem with pinches is just because something is pinched doesn't mean it can't get more pinched and just because something has been pinched for 2 months doesn't mean it can't stay pinched for another month or two or even longer. Eventually though the pinch must relieve and it will.
Now will GDX have run so high like to $27 or something that DUST is then 75 cents or something before it finally gets its run to break the longneck pinch? It is possible and if that happens then it could run 300% or more and yet only be back to 2 or 3 bucks. Not very useful if buying at 2 or 3 bucks. Plus most holding DUST now will have given up by the time it finally runs.
Some might ask why would I give out info about pinches? Why let other know if they don't know already? Well to talk about the existence of a pinch doesn't help at all. As I said just because something is pinched it doesn't mean it can't pinch more and for longer. People get hammered all the time when trying to do a pinch play. Experience is very key to knowing how to time a pinch.
This one is a challenge for me because usually I'm playing a pinch as a bull. This is an inverse though so it is a bear ETF and a play that is pinched due to the giant bull run in miners. Now I'm playing a pinch as a bear and it is challenging.
Principals are the same though and so I will cautiously stick with it. So far 8 out of 9 winning trades here for me ain't too bad. Eventually DUST and JDST will have a big run though. They have to. They can not and will not stay pinched indefinitely so yes eventually miners will selloff a big enough amount so that their inverses (DUST/JDST) get a good run and relieve their pinches which then places things back to equilibrium. Until this time happens there will be a big imbalance and this imbalance must and will correct itself. Now exactly when this happens, well that's the hard part.
This is also how I know that the intent was not to accumulate mining stocks for the long haul. When one side of the trade gets so biased that the other side gets pinched then what has been created is unsustainable and will falter eventually. Mining stocks could have been ran up in a natural and disciplined way which would not have pinched the inverses but instead miners went up in a parabolic way and that has pinched the inverses. Equilibrium must and will be returned, so because of the very nature of how and in what way miners went up which pinched the inverses tells me that the intent is not a long term play in them.
Knowledge + risk taking = prosperity
AI
