This is just a quick note to let you know that since mining stocks are moving higher today and are almost (because the price level on GDX is the only binding level, the one for DUST is not) moving to their stop-loss level and at the same time gold corrected only to the 61.8% Fibonacci retracement level (which could be indicating the final top for this rally), we are moving the stop loss level for mining stocks higher. The stop-loss level for GDX for our short position is now $19.63. We will provide our best current estimation (non-binding one) for the DUST ETN in tomorrow’s alert. We are not changing stop-loss levels for gold or silver.

If it turns out that today’s volume is relatively low (compared to the previous days), the implications of today’s move higher might actually be bearish. We will not have meaningful volume data until the session is over, though. We’ll let you know our thoughts on the above in tomorrow’s alert.

Since we are still receiving questions about the stop-loss levels for the DUST ETN we would like to take this opportunity to quote the following (we have been writing the following in each alert for many months);

“Since it is impossible to synchronize target prices and stop-loss levels for all the ETFs and ETNs with the main markets that we provide these levels for (gold, silver and mining stocks – the GDX ETF), the stop-loss levels and target prices for other ETNs and ETF (among other: UGLD, DGLD, USLV, DSLV, NUGT, DUST, JNUG, JDST) are provided as supplementary, and not as “final”. This means that if a stop-loss or a target level is reached for any of the “additional instruments” (DGLD for instance), but not for the “main instrument” (gold in this case), we will view positions in both gold and DGLD as still open and the stop-loss for DGLD would have to be moved lower. On the other hand, if gold moves to a stop-loss level but DGLD doesn’t, then we will view both positions (in gold and DGLD) as closed. In other words, since it’s not possible to be 100% certain that each related instrument moves to a given level when the underlying instrument does, we can’t provide levels that would be binding. The levels that we do provide are our best estimate of the levels that will correspond to the levels in the underlying assets, but it will be the underlying assets that one will need to focus on regarding the sings pointing to closing a given position or keeping it open. We might adjust the levels in the “additional instruments” without adjusting the levels in the “main instruments”, which will simply mean that we have improved our estimation of these levels, not that we changed our outlook on the markets. We are already working on a tool that would update these levels on a daily basis for the most popular ETFs, ETNs and individual mining stocks.”

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts