February 18th, the opening head game

Well,

The opening was very interesting. The index is doing what I suggested it would but I got shaken out before getting into any trades. I intended to get in on the initial roller coaster ride but didn't expect two things:

1) it happened very fast off the start
2) HGU and HGD BOTH went down at the same time

In theory the two funds are the inverse of each other proportionally based on percentage changes, with some margin allowed for trading spreads. So, if HGU goes down then it stands to reason that HGD should go up.

BUT THAT DID NOT HAPPEN! In the first two minutes Global Gold (GD) dropped about $1, HGU dropped close to 10 cents (which is about right) and HGD also dropped about 5 cents...HUH? It should have gone up by about that amount.

I seriously considered a quick momentum reversal play in minute two as I figured that there must have been a glitch in HGD and it will quickly head back up...but that is a very early entry and prone to problems with a market order....with a regular stock that is. ETFs seem to work differently when it comes to higher volume activity. My hesitation was my downfall on this move.

So everything settled out in minute three and was back on track...except that I was not on board. Minute three moved too far too fast for me to feel comfortable getting in but I should have gone with my estimation of the movement that I made yesterday and just bit the bullet and ordered.

Alas, HGD has moved 40 cents from open and 50 cents from where I would have tried to get in had I not hesitated.

So now I just wait for things to settle out and see where the rest of the day leads me.

Jeff.