JNUG likely to fall if it closes at 8.47 or below
Updated
The Junior Gold Miner's ETF performs better on average when it closes above the previous day's Hull Moving Average than when it closes below. This relationship is particularly strong in the months of June and December, historically JNUG's strongest months. (Anticipators of gold's historic June strength likely drove gold's bull run on May 30-31.)
Today JNUG crossed below its previous day's Hull (8.475), and I give it better than even odds of closing below that level. If it does close at 8.47 or lower, look for a significant drop in the next few trading days. If not, then JNUG may move higher.
The JNUG gold miners ETF reacts to the price of gold (XAUUSD), which reacts primarily to the US dollar. The dollar's next moves will be determined by expectations of a Fed rate cut. If investors remain bullish on the likelihood of a Fed rate cut within the next year, expect both gold and JNUG to break out higher. If expectation of a Fed rate cut turns negative (as it seems to be doing), expect the dollar to return to strength and XAUUSD and JNUG to break out downward. With Bullard the only Fed member signaling a rate cut and others saying a rate cut isn't warranted yet, I'd put 60:40 odds on a strong move downward in the next week before upswing on safe haven demand near the end of the month.
If you'd like to short JNUG, you can use the JDST ETF. This is just an idea, not trading advice.
Today JNUG crossed below its previous day's Hull (8.475), and I give it better than even odds of closing below that level. If it does close at 8.47 or lower, look for a significant drop in the next few trading days. If not, then JNUG may move higher.
The JNUG gold miners ETF reacts to the price of gold (XAUUSD), which reacts primarily to the US dollar. The dollar's next moves will be determined by expectations of a Fed rate cut. If investors remain bullish on the likelihood of a Fed rate cut within the next year, expect both gold and JNUG to break out higher. If expectation of a Fed rate cut turns negative (as it seems to be doing), expect the dollar to return to strength and XAUUSD and JNUG to break out downward. With Bullard the only Fed member signaling a rate cut and others saying a rate cut isn't warranted yet, I'd put 60:40 odds on a strong move downward in the next week before upswing on safe haven demand near the end of the month.
If you'd like to short JNUG, you can use the JDST ETF. This is just an idea, not trading advice.
Note
Today's extremely weak jobs numbers and weak dollar in Forex trading are a bullish sign for gold and have XAUUSD hovering right below the 1330 resistance level late in the day. There are more jobs reports coming the next two days, and they're likely to be weak as well. If JNUG settles above 8.47, as I now expect, I will maintain my long position and look for an upward breakout tomorrow.Note
Lots of volatility around 8.47 at end of day. Google says JNUG closed at 8.46, but Fidelity puts the close at 8.49 and Trading View puts it at 8.55. I've decided to maintain my long position for now, but it's an iffy one.Note
XAUUSD broke upward through 1330 resistance after hours, which makes my long position look like a winner here.Note
I held my long position for one more day and made about 2%, then liquidated it when it closed below the June 5 Hull price of $8.96. I decided not to short, because I was busy this weekend and didn't have time to monitor it. Now I wish I had, because it looks like it would have been quite a profitable short!
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