Monday, September 10, 2012
BUY DUST @ $29.80
I bought a slug of Direxion's Gold Miner BEAR 3X ETF (DUST) early in today's trading session at $29.80. That turned out to be the lowest price of the day. Wow, I wish I could do that all the time, but of course I cannot.
For now I am looking for a selling price that would be in the area of the gap open overhead - around $34.50 or so. This price area would amount to a 50% retracement of the collapse begun on August 31. The three take downs (beginning July 24) preceding the current episode retraced 61.8%, 38.2% and 38.2%. Today's action stopped at the first Fibonacci retracement level - 23.6%.
I restudied the daily chart of gold last evening and refreshed my recollection of previous studies I had done regarding explosive gold rallies. What I was reminded of is the very strong tendency of gold rallies to be retraced by 61.8%. In fact, there are only 3 or so rallies in the past 10 years that have not retraced at least 50%, and none of the exceptions occurred in the first weekly cycle of a C-wave. So this was the encouragement I used to purchase DUST today.
I ran into a huge snag last weekend with my real-time trading system experiment and when I could not fix the snag, I decided to throw in the towel for now. The problem was that I spent the past 3 day weekend doing a kazillion 'tweaks' to the code, but unfortunately did not do them on a copy of the code, but the actual file itself.
Bad idea, in retrospect.
When I tried to get the code back to where it was at the end of the first week of the experiment, I simply could not. Essentially, I had inadvertently corrupted my data and compromised the integrity of the results it was outputting. It was like I was trying to make the Kool-Aid sweeter and after I put in too much sugar I could not take the sugar out. Or something like that. Very disappointing.
My TSI Trading record has been updated.