I wanted to talk about a trade I did that is really important. The FOMC announcement took place in which Janet Yellen comes on the news once a month and gives a speech. Her speech is about the Federal Reserve Bank’s decision on whether or not to raise interest rates. They also have a general discourse on what they’re seeing in the economy, which always tend to give a jolt to the market. There are several different reactions to her speech. You can use Bloomberg or Benzinga to get the news, but everyone in our chatroom always talking about it too.
What happens is, when they talk about interest rates, gold moves. I had a flat day because the market was choppy, waiting for this move. Towards the end of the day, you started to get a bit of a run in the market. One of my goto’s when the market starts to move after the FOMC announcement is a move in gold.
99% of the time, gold is awful to trade. But when the FOMC has a statement, gold can move really well. So I had a cool trade in NUGT, which ripped $500 towards the end of the day. Gold usually moves really slowly. But gold has a 3x leveraged ETF called NUGT that will move 3x what the gold miners do. What you can do is wait for the stock to come out of range. Then look for a quick pattern to hit it. Towards the end of the day, it starts to make the initial move right when the FOMC announcement is made at 2PM.
Initially there was no entry, but as soon as we see the sideways consolidation I bought this thing right at $32.72 and my stop was just right under the 9EMA. I’m actually treating this like it’s the market open. This is an opening range breakout pattern, which usually cannot be applied to end of day setups. But if there’s news out and you get a big thrust, you can use that end of day pattern to really ride this. I sold some into the first pop and literally scaled out along the way. In ten minutes, I was able to make about $500.
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