Sold JAG, bought DZZ just now
I just sold my Jaguar Mining at a very healthy $11.20 a share, a nice rip over the past few months, and moved the proceeds into DZZ, a 2x gold short fund. Why you ask? It seems everybody is going all goo-goo ga-ga over the break north over $1k in gold. Why am I getting short?
Well, look back at a chart of gold. How many times has it been over 990? 5. How many times has it gone over 1040? 0. Once we reached the February high in the middle of the night last night, gold stalled despite continued selling in the US$. This was a divergence. Sure enough, as soon as bucky began to rally this morning, gold dumped, as big sellers appeared on the futures market, spiking gold as low as 992. What will we see on the gold chart when we look back with hindsight from November or December? If you said another high-volume reversal at $1,000/oz leading to a sharp sell-off, I'd bet you'd be right. I know that's the bet I'm taking. Of course, should the all-time high in gold (only 4% away) go down, bet comes off and I take my chips home--nice risk/reward on this set-up.