Thursday, September 22, 2011

Buy/Sell EDC - $13.15/$13.55

This afternoon I decided to try my hand at a brief day trade and see if I could work on getting my chip shots to land on the green, as in days of old.

This 15 minute chart of Direxion Emerging Market Bull 3X (EDC) seemed to have some of the True Strength Index (TSI) indicator ingredients in place for a favorable short term trade. Namely, a positive divergence and a trend line break BUY signal. My purchase was at $13.15 and a short while ago I sold the position for $13.55 in the after market.  A modest 3% gain and a nice first outing.

My TSI trading record has been updated.


  1. nice trade John,
    I was too scared and confused to try anything today....since I bet the wrong way before the FOMC and had my confidence dented.
    First I want to thank you for enlightening me on the TSI. It seems to work on almost any time frame. It's helping me.
    What about bonds? Treasuries. They are spiking up and seem like a good short opportunity. TMV or TBT. M-

  2. Hi Monty - yeah, another reader asked me the same question earlier today about bonds. I just looked at them again and I would not touch them with a 10 foot pole just yet. No way are either TMV or TBT ready to do something nice for us.

    I'm going through a list of the prospects for tomorrow and TSI-wise, these look very promising:

    DRV, DUG, DUST (I think could reach $90 in November), ERY, RETS, SRS, TYP

  3. Hi John,
    DUST to 90? thats a double from all time high, why 90 is so special?

  4. Anon - I was throwing that number out there after eye balling the HUI and DUST charts. 90 is not so special and maybe 75 is closer to realistic.

    The HUI corrected 36% off the 2004 gold C-wave, 33% off the 2006 C-wave and 71% off the 2008 C-wave. Considering the apparent size of the current deflation, a 40%+ correction seems conservative to me.

    That would bring HUI's recent high of $640 down to something like $384.

    We do not have any direct history to compare DUST with a HUI price of $384, but a price substantially higher than DUST's Jan. 2011 high of $55 is obvious. At that time, the HUI low was $492. Assuming HUI ultimately falls 100+ additional points to $384, DUST would rise from $55 considerably. I would think to $75 at a minimum.

  5. It looks like the D-wave had started.

    What is your target for and silver, John?


  6. Here's a good link to a Leveraged ETF stop calculator to get price targets for DUST, NUGT, AGQ, UGL..etc.

    It only works after trading hours.