Replies to post #8896 on Direxion Daily Junior Gold Miners Index Bull 2X Sh (JNUG)

[nathanial]

The links go no where.

[StockItOut]

Draw a downward-moving upper trendline from March 21st, and an upwardward-moving lower trendline from March 9th. This is what I'm referring to and working with.

Sorry, don't have access to post a 30 min chart, and then not quite sure yet how to post images here on iHub.

[Qone0]

Ok, I'll show you the difference.

Look at the closing red line.
Look at the first run up off the bottom to the top of the run.

Look at the price of GDXJ then and now
Look at the price of JNUG then and now

JNUG has lost about 40 cents in price in it's relation to GDXJ between then and now.

This is caused by the daily rebalancing of swaps in the 3x etf in up and down price movements. This is called NAV burn. Charting MA's and envelope indicators there is not much difference between GDXJ and the 3x's in shorter time frames.

However using any horizontal lines of support and resistance will be badly off in the 3x's due to NAV burn. I only chart GDXJ due to this, then I don't have to worry if a Bollinger band is off, I know when the horizontal support and resistance is.