We hold 400 shares with a 40.31 cost basis after imputing to them a small loss taken on 400 additional shares exited on a stop at 40.21. Our initial entry on 800 shares looked fabulous, at least for a little while, since we caught what appeared to be the exact low of a $1.40 plunge. GDXJ rallied 50 cents soon thereafter to 40.71, but that wasn’t quite high enough to permit us to exit half the position at 40.79 as I’d recommended. While I was busy patting myself on the back for catching the exact low, GDXJ turned south again with a vengeance, stopping us out of 400 shares at 40.11. My intention was to hold the remaining 400 shares ‘come hell or high water,’ but because there is now downside risk over the near term to as low as 37.89, I’m going to play it by ear. I’ll decide how to handle the position after I’ve seen how gold futures act Wednesday night. If they recover at least somewhat, that would improve the odds for a bounce in GDXJ from the 39.22 target shown (see inset). _______ UPDATE (4:26 a.m. EDT): A modest upturn in gold futures overnight has had an encouraging effect on this vehicle, causing it to leap 79 cents. However, it’s difficult to predict whether the bounce will continue into the regular session, or whether it will fade and the April contract will relapse to a projected washout low at 1321.20. Officially, we’ll continue to hold the position, but feel free to exit if you’re not comfortable with the risk. _______ UPDATE ( 11:26 a.m. EDT): Use a 36.99 stop for GDXJ. Current low is pennies from the D target of (5-min) a= 42.78 on March 18. _______ UPDATE (2:18 p.m. EDT): We exited on the stop for a theoretical loss of $1328, one of the largest losses ever booked for a tout recommendation. GDXJ had already fallen by $6, or about 13%, when we climbed aboard; but as of today it has fallen by $9, or 20%, and looks like it has farther to go. My current target is 34.00, and any rally to the 37.62 ‘p’ midpoint pivot associated with that number should be regarded as a ‘camo’ shorting opportunity. We’ll look to recoup by buying aggressively f and when 34.00 is hit or very closely approached.
