GDX Model day trading information

[Pascal]

I am not too happy with the GDX Model, which is caught in whipsawing situations due to a high reversal pattern.
I have however noticed that I am doing very well trading NUGT/DUST during the day, but in the direction of the day-trend. We indeed have had many strong trend days lately.



I did a quick research on trend/reversal days for GDX and found reliable patterns.
the idea is to measure the price gain before the previous close and the price at 10:00

If first 30 minutes are < -1.2% then rest is negative aver = -1%
If first 30 minutes are > 0.7% but lower than 1.4% then rest is positive aver = 0.47%
If first 30 minutes are > 1.4% then rest is negative aver = -0.7%



We can see that being invested during the day for only thirty trading days since last September would have provided a non-leveraged gain higher than 20% (About 60% using a triple leverage instrument.)
The most important in using leveraged ETFs is to not keep the position overnight.

For this reason, we plan to add to the GDX model a day-trading information field, which will inform between 9:45 and 10:00 the type of day we are in and what we should expect.



Pascal

[Pascal]

Today's first thirty minutes were not in any of the ranges for a trend or a reversal day.
This means that we will be probably in a range day, with the MF allowing to trade divergences such as what we are seeing now.


Pascal