Elliott Wave Training

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http://wavepatterntraders.blogspot.com/2012/04/elliott-wave-training.html



Showing posts with label DUST. Show all posts
Showing posts with label DUST. Show all posts

Monday, October 21, 2013

Gold Stocks Index (NUGT & DUST) Elliott Wave Analysis

This is an update to my last post dated 15th Oct 2013.

http://wavepatterntraders.blogspot.com/2013/10/elliott-wave-analysis-of-gold-short-term.html

I cautioned the bears on Gold stocks that a bounce was likely setting up, i was seeing negative sentiment, as well as the set up on DUST and on HUI.

The actual set up on DUST and $HUI was key for me, there was too many DUST bulls on Stock Twits. proclaiming  this was "too easy"

When sentiment gets like that, alarm bells need to be ringing.

It appears that was the case

DUST Before:


DUST After:







The decline from the last high appears to be in 3 waves so far, so we want to see a new low to make it a 5 wave decline.

That will be a negative sign for the DUST bulls, although once a 5 wave decline is seen we should see a bounce in 3 waves to correct the decline, followed by more downside.

Any short term bounce i suspect is wave [iv], so requires to remain under $38.70.

But we can also watch the same idea on both NUGT and GLD.

Although i actually prefer to count on the underlining market as i find these 3xETFs have to much skew and don't always align 1-1 with the market they are meant to be tracking.

So the trade is to look to sell a bounce on DUST stops at $38.70.

NUGT




Or you can buy NUGT above $42.47 (its wrong below the blue line) and target a move above the last swing high to around $49.00.

GLD

Alternatively you can just play it via GLD.




 A dip to around $125.50 would be ideal stops need to be at $124.38 as that would be a rule violation if wave [iv] moved below the top of wave [i].

Target 128.50

If we were to see a 5 wave move on both NUGT and GLD, that would be bullish sign (5 wave decline on DUST).


Tuesday, October 15, 2013

Elliott Wave Analysis of Gold (short term)

I have been working the idea of seeing $1240 for a few weeks, just after the FOMC was when i really started to suspect its a possible triangle


Although it needs far more price action to fully confirm that idea, based on the daily chart i suspect its working a complex 4th wave.

A triangle is a very common pattern, hence i got on board about 2 1/2 weeks ago and working the idea of a low around $1240 for a possible [b] wave.




The decline from $1433 is NOT impulsive, contrary what other Elliotticians are counting, its a corrective looking decline, although as we have been targeting $1240 it has made no difference as i have been advising members to to remain short this market.

Currently Gold is a sell under $1300, but the closer it gets to $1240 (our 1st target) then more cautious i become.

I have noticed sentiment has really tuned nasty over the last few days.

When this was at $1420 i suggested that this would be setting up for a reversal, much to the disgust of the Gold bulls that idea as promptly ignored..

Funny how it worked out quite well, when Gold was at $1420 all i kept reading was the "low was in" and say hello $1640 next stop.

I guess traders never spotted the 3 wave bounce from $1180 then?

I think the Gold bull bus must of derailed or something?

Which brings me back to my point about being cautious here if you are short Gold or bearish here.

Now i am reading targets of $1100 and $1000.

Funny how i never saw those targets when it was at $1420, yet as Gold has puked, the "late to the party" bears come out and get vocal, errrr where have you been?

If i am right about a possible bear trap, then i suspect its going to find support around $1240 and potentially surprise many bearish traders.

That's not to say I am uber bullish, but there can be a nasty move higher here for those that are now deciding to join the "short bus".

I still think this sees under $1180, but i personally don't think it will be a straight run lower, i think the market could have a few tricks left.

I would be very careful if you are short Gold as it approaches $1240.

As Gold approaches $1240 i am also watching Gold stocks via the $HUI.

We can see from the last swing high it looks like a 3 wave decline and getting close to support near $200-2010

If both Gold and $HUI stay as a 3 wave decline, that will support the idea of this being in a [b]
 wave and a possible bear trap.


 
When i look at $DUST, it reminds me of the peak on $DUST a few months again, the sentiment towards $HUI, $NUGT and $DUST is starting to get intensive, hence if $DUST stays as a small wedge/ending diagonal it is suggesting a reversal.

So if $DUST reverses HUI and NUGT should reverse as well



Sunday, August 18, 2013

DUST: A classic case of Elliott Wave at work

Do you remember the euphoria as DUST was hitting the $160 area?

You could not go wrong buying DUST, its was a Gold mine (pun intended)

Well just a little bit of Elliott Wave Knowledge (or follow someone who can count Elliott Waves correctly) would have saved those bag holders from blowing up their accounts.

Sadly this is common place, investors and traders never learn their lessons, and boy did the DUST bulls learn a lesson.



I posted these comments on the 26th June

"When i look at the Bear ETF, it too looks like a 5 wave advance, so argues for the same evidence that HUI is close to a reversal"


I posted this chart to members before the reversal, the structure was suggesting a reversal was setting up and subsequently i was expecting a reversal in the HUI (HUI and DUST trade inverse to each other)

Dust gave the bulls a 2nd chance to get out, but many fell for the "trap" around 143.


Currently it stands at $48, that's account destroying stuff if you never used stops.



Its already hit my 1st and 2nd targets, these leveraged ETFs are dangerous if you don't know what you are doing, but equally are a great tool for making substantial $$$, for moves such as this.

This is exactly why the herd gets destroyed as they chase the momentum that's already happened, the trade was to be looking for a low in the HUI and and reversal in DUST as some members were.

Not chasing a move that has already happened.

Elliott Wave helps us read through the "noise" and focus on price and patterns.

If you got caught by the market, think of it as a learning experience, as the next time you see this sort of euphoria, take a step back and think about the trade you are taking.


HUI so far has met a measured move target, so what it does from here will have larger implications to suggest if a meaningful low is actually now in place, subsequently it will have an effect on DUST as well.

Staying above 240 of the HUI will be a good sign the bulls mean business and this is the "real deal'.