UVXY is invested at 18 VIX (at the start of the day). Those are May futures and contango is brutal. Almost 20%. New roll at 20 VIX starts next week so the holders are dumping positions.
That's almost $25BIL of bankruptcy filings in a week. Crazy.
UVXY is almost 100% invested in May VIX futures currently at 17.05. I expect market to drop and May to move to 18 next week. That will be a gain of 5.5% on VIX futures and 11% for UVXY.
Catalysts for drop in the market are profit taking, oil going down due to Doha talks failure (no Iran), Apple production drop by 30% would expect sales to be down as well. AAPL and all component makers will be down as well. Expect a pullback in financials after a big run.
So there is hardly a sector in the market that can take us higher from here. VIX has been hammered and USD is sitting on the trend line ready to go up.
IF GDX goes back to $22.70 - NUGT goes to $83.27.
4 days ago GDX was at $22.70, NUGT was at $84.15.
And that' just 2 days. Pretty much it gets killed unless you get a one directional move like we had from late January to end of March. This is a once in 2 year event. If you get up and down market you lose on a daily basis little by little.
Long miner and gold stocks.
Yesterday he was long miners and gold.
China produces the most gold on earth. Chinese miners have much lower expenses per ounce.
They would first have to fire all management to cut costs.
Who knows if this is coming back by the end of the week.
Unbelievable. NUGT started going down 2 minutes after his interview.
They took out shorts, now they'll take out longs.
This means the ride is over and FED is actively looking to take down gold. So very quickly we could go from ultra-bullish to being afraid. Question is how much decay will NUGT display on the way down.
Pretty unbelievable how they hate gold so much.
Tradition of buying gold is heavy only in poor Asian countries like India and China. And of course rap stars for displaying their grills.
This means Gold will once again be sold off.
Will get pretty crazy. RSI of 80 on GDX won't last and all of these overlevered companies are at the highs despite the fact they are so in debt and have been depleting their mines of high grade ore to lower the cost per ton. Now they are left with low grade ore hoping for higher prices.
It typically decays after the drop. That is why both bull and bear ETF funds end up losing 99% of the value. So expect that this time won't be any different. It may reach $200, but on the way down it will decay to $5 and then it is a tough road back.
of the depreciating assets.
This one is still in trouble. They can sell all gold mines and they would be shy by billions to cover the debt load. You are paying quite a bit for this company if value on DCF basis.