New GDX Short Entry – October, 20, 2011

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The first resistance cluster of IWM is now even stronger (25) than yesterday and should put heavy brakes on intraday upwards excursions. The opex maximum pain scenario is panning out well with a flat week searching equilibrium around the weekly pivot (69.34).

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As a reminder, the multi-pivots are almost counter-productive for trading an initial entry on the emotional and retail-driven GDX. Therefore, it is always better to enter the new short position right at the open market price today with an initial stop 12.02% above the entry price . If you enter with the double inverse leveraged DUST, you also need to enter at an open market price but with a correlated indicative stop 22.95% below your entry price. Those wide stops are not for the faint of heart, so don’t put too many of your eggs in this basket! But the potential reward is high with two heavy floor resistance clusters and far-away support clusters.
Billy

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