But this week it touches $9.20. NAV closed at $9.90.
With Futures up, I expect VIX 2 months out to go from 16.125 to $15.75 so that is where I get $9.20
80% of the fund had been rolled.
VIX rolled into futures 2 months out. Those are trading about 20% higher than spot.
So tomorrow after jobs numbers if the market holds (80% chance). VIX spot gets murdered and VIX 2 months out might lose 5 - 7%.
So UVXY will trade approx. $8.35 - $8.60 tomorrow. The roll and contango are killing this fund.
Market has to be obliterated by 10 - 20% in order for UVXY to go up to lets say $20.
will be trending down towards spot VIX.
They are already 50% in June and will be at 55% this weekend.
So pretty horrible investment. You have to pay up 20% more for 2 months to get the same thing. That is 60% for UVXY price.
Just for consideration if you think you should buy.
You get Federal Tax credit of 30% on the $3500, so the real cost is like $2K. I can buy 2 units every month and hook up the neighborhood.
This is so scale-able. Anyone with solar roof will buy it. After that they'll buy Model 3.
Only $3.5K should be payback in 2-3 years after Federal Tax credit.
UVXY is at $7 in a flash.
VIX curve is looking bad for UVXY in the next few months, however there could be some turbulence for the market after this most recent pump.
If we get a serious correction than VIX could end up at 25 - 30 and UVXY would be approx. $35.00 - $40.00.
Things are beginning to look bad in all currencies and the indication is that all CBs will print. They've tipped their hand well over the past 7 years. China will also print, so the only way establish decent value is in Gold even if it yields zero.
That in addition to shorts being at all time high. These folks might be soon trapped on both sides of the trade (short gold and long market).
all pointing to future raise in the rates. USD will appreciate vs. Euro and we know that Gold gets hammered at that time. Miners are a horrible investment if Gold dips further. Heavy capex needed to replace mines, while margins are razor thin.
Gold is easy to manipulate. Once big banks have bought enough gold miner stocks on the cheap, they'll reverse the trade and take gold up to the point you'll start questioning your reasoning and start shorting. But it will go up even more since then they'll be selling those shares,
GDXJ could go up to 85 from 22 now. That's 50% of where it was in 2011. So with compounding JNUG will go up to ridiculous levels.
If GDXJ returned to the high of the year (45), JNUG would trade at $80.
If GDXJ reached all time high due to Gold Hitting 2000 again, JNUG would trade at $2100.
Leverage works both ways. I've seen these kind of returns from XIV.
From $4 to $50. Pretty crazy.
Capital expenditure costs have gone down and so have financing costs.
All we need is an acknowledgement that the USD is too strong and FX swaps with ECB. This will be read as USD QE and Gold will rocket.
Miner like GG have hardly any debt and represent 33% of NUGT impact.
I did the math and if Gold went up to 2000 and GDX climbed back to $51, NUGT at that point would trade at $210. I'm not sure what the chances are that Gold will go back up to 2000, but this tells me that NUGT could reach $30 - $50 without much problem.
About 2 years ago VIX destroyed XIV fund (reverse VIX). It was at $4. Fast forward 2 years and it traded at over $50 at one point. That's a massive return. Once NUGT goes up the increase will compound on itself.
Crude continues to slide as the storage level drops. USD goes into selloff or correction mode despite ECB QE due to FED instituting FX swaps. As Gold rises shorts cover. GLD fund already at lows comea into play again. India establishes gold savings accounts and drops VAT On gold sales.
Due to USD strength they can't increase rates so they'll weaken USD first and do swaps for Euro first. Gold will rocket up when this happens. Even though ECB is going to print 1 trillion Gold went down. Sooner or later pepeople will figure out that Central Banks can only print to keep the status quo and they do so in coordinated fashion.
GDX has been here only 2 other times in the past 8 years. I also think it is a good entry point.
All commodities are hurting because of strong USD. Currency market is cyclical as well and there is going to be a correction in USD. That will shoot gold up and FED will continue to print in the future and US Treasury will be going deeper into debt.
If GDX recovers to $24 - $26, NUGT would be worth $30 - $35. That's a clean triple from current levels.