What I Expect from the Employment Numbers
A knee jerk reaction in either direction, but most likely the initial knee jerk will be to the downside.
NUGT will tank if the nonfarm payrolls are from 175,000 or above
NUGT will go up if the nonfarm payrolls are below 150,000, but watch out, if the number is 100,000 or below because investors may not buy the number.
I'm not holding DUST or NUGT into the number, but if I wanted to gamble I'd be short Nuggie or long Dusty. I believe our economy in on the mend, so the numbers should be good. There are those funky autoworker layoffs that occur each year during this period that might skew the numbers, the talking heads will make their adjustments after the announcement, so beware. The market has no conscience, it doesn't remember the beating it handed Nuggie yesterday, therefore it will not hesitate to punish the little guy some more.
In my opion there will be a NUGT rally latter in the day, after DUST settles and I'm looking to see a substantial short covering rally going into the weekend. What time will this rally occur?
Your guess is as good as mine, but I will commence on or before 3:00 PM and continue to the close. Investors are profiteers, they want to keep their earnings safe and love the feel of cash safe in their account, so they will cover. There are all kinds of things that could occur over the weekend, terrorism for instance. We have closed several of our embassies as of late due to the expectations of unrest and terrorism. There is the continuing conflict in Egypt and on and on.
If you are long Nuggie, you might have more pain to endure, but there might be a reprieve later in the day and then there might be no reprieve at all. Many fell into the mantra of the talking heads that felt gold would go the 1400 (sooner or later) and for a while, that seemed possible, interim. No doubt gold will go to 1400, but NUGT is not gold, it is a derivative of gold mining stocks. Actually, according to Dr. C, Nuggie is a derivative of a derivative and leveraged 3 to 1. NUGT can inflict both pain and pleasure and must be treated in accordance to one's risk tolerance.
I've learned a lot from playing with NUGT, I'm not too much into technical trading, but I'm learning candlestick charting. One thing I know for certain is that a news event can trump charts on an intraday basis, but there will always be support and resistance and gap fills. Yesterday I made the mistake of waiting for a fantastic end of day Nuggie bounce, instead he tanked and in the afterhours was a limp, catatonic zombie.
It should be a fun day, as with all opinions, take mine with a grain of salt or not at all.
Good luck to all. :)
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