Market Vectors Junior Goldminers ETF (GDXJ)

[eddyimano]

Does anyone believe this? This one came out from one of the gold bug guys.

Because the ETF got so popular and the small-cap miners are truly a tightly knit group of companies that are not collectively worth that much, the ETF couldn't find ways to deploy cash. As a result, it is now having to rebalance its components.

This rebalancing is already underway, with hedge funds, short-selling funds, and retail investors all looking for a way to either make a killing due to this selling avalanche or protect their holdings from further declines.

The rebalancing is set for June 16th.

Between now and then, expect significant volatility in all the sub-$1B market cap junior and mid-tier gold companies. Shares of companies will be sold by the GDXJ so the new ETF can become a “large mid-tier to small major” gold ETF.

The GDXJ is going to dump close to $4B worth of junior mining shares – that's a massive amount.

This is coming on June 16th, right when the FED next announces an interest rate decision.