The first day of every new month sees capital flow from pension plans, defined benefit plans, and many other funds. We saw some of that today but the next 1-2 days may be challenging to make any real headway through 3070 SPX. A breakout over 3100 may wait until after the June FOMC meeting next week on the 9th/10th.
We will look to sell NUGT in the coming 3-10 days before a reversal occurs. Expect the junior miners and silver to top shortly with NUGT. After we sell our position, if one wanted to remain in the trade until they see a reversal a hedge in our opinion would be recommended. We will discuss this in the next few days. A good trader’s job is not to "get it all” but a large slice of the move. It’s impossible to get it all 99% of the time - the risk holding a position on its last legs frequently outweighs reward and there are too many profitable trades on the horizon to lose capital. The continued moves coming up in the metal’s markets over the next 3-4 months will be capable of changing people’s lives. These are moves that occur once every 15-20 years. The profits in metals easily generate more returns than the stock market when the environment is right. We're glad you have the opportunity to experience one alongside us; some of our staff have traded through several of these parabolic moves. The coronavirus has poured gasoline onto these upcoming moves and they will be greater than we have expected.
A super spike up to $1900 is possible but would require a binary event that our system does not currently see. We favor gold staying in the box above until we get a more meaningful correction later in June. This will be the fuel for more upside. June is one of the weakest seasonal trading months for precious metals. Last June the trend was up in a big way but it's highly unlikely to expect lighting to strike twice. Look for the bullion banks to manufacture what appears to be a breakout, near $1800, and have retail traders chase before they quickly pull the rug out from underneath as traders think gold is headed north of $1900. Then the real move will begin.
Our two new positions in X and BLMN are in profit with more upside expected short and medium term.
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