Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG)

[Bruce A Thompson]

The confluence of events that led to the recent scurrilous lows on Sunday
night are somewhat dissipated. The corpses of bottom-pickers are strewn
about the landscape as a reminder never to push too hard. Now the
shorts can start to wring their hands as the scenario transmogrifies. A big
factor for the drop in precious metals from early August to Sunday night
was the corresponding strength in the US dollar. The dollar rally was
predicated on expectations of a rate hike from the Fed. Said rate hike
being justified because the US economy is performing at or above the
levels the Fed has gone on record as saying it deemed necessary for it to
take the pressure off rates.
BUT another important factor to remember is that it wasn’t all strength of
the dollar, but an acknowledgement of the weakness in certain European
and BRIC economies. This is getting more traction now because the
market learned years ago that the US can only do so well when the rest of
the world is hamstrung. Now US rate hikes are put on the back burner
and Yellenke has another arguably valid reason to maintain the status
quo. She gets another reprieve and the can gets kicked a little further
down the road. And with Election Day right around the corner, it is
reasonable to expect no rate moves until December at least.
http://www.kitco.com/reports/MIT1007.pdf