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