Saturday, May 16, 2015

Junior Miners Trade Recap

I shorted the junior gold miners index this morning at the open. I used the 3 x leveraged ETF JDST. The idea for the setup was that GDXJ the index was very overbought which you can see by just the price candles and especially in RSI 2. I drew all of this up in the chart below. The other thing was that the previous day it had gapped up ran and faded all the way down. It printed a clear shooting star candle. The candle also was above the upper "Bollie" bollinger band. The dollar looked oversold which drives gold which drives this index. I shorted the open which was below the previous close and it looked like more lows were coming. JDST found support at 6.50 in the morning so I set a stop loss to trigger on a cross below 6.48. It triggered later and I sold JDST for a 5% loss on a slightly undersized position. I'm neutral on GDXJ now and may trade the breakout or a consolidation.

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