7/20/2009

Shorted Gold with DZZ

Gold looks ready to resume dropping, so I bought some DZZ (2x Gold inverse ETF) around $20.20 with a stop @ $18.00. I think gold could test 800.

The daily chart above shows my interpretation of price action over the past year. I think we have completed WaveA and WaveB of a flat correction from $1028 in March 2008. It appears that Wave-c of WaveB was truncated (meaning it did not make a new high), and now gold has started to downtrend once again. I'm shorting the Wave-ii of WaveC correction in hopes of further drops in price.

6 comments:

Anonymous said...

i hear ya

----t h rive---- said...

DZZ's not worth it. I would recommend puts on something. I like putting GDX. Though it moves differently, it's a great stock to chart.

Good luck!

Narayana said...

Why, what's wrong with DZZ?

keithpiccirillo said...

Decay.

Anonymous said...

what about the long term IHS on Gold?

Narayana said...

Good point, that is why I have a stop if gold gets above $1000, which equates to about $18 on DZZ.