That sounds a lot more like herd mentality then it does "smart money" mentality. You mean to tell me the follow:
1) That GDX has 4 gap ups in the chart. At 20.23, at about 17, at about 15 and a half and at about 13 and a half and NONE of those are going to fill? 4 gap ups in 1 chart and not 1 will fill?
2) The assumption that miners go up huge when the market crashes or from recession (deflation). Well then why the hell did my USAA precious metals fund (fund of just mining stocks) drop about 50% in 2008 in just a 9 month period? Why was that if miners are such great hedges? They are stocks and they are part of the market. Deflation hits and market crashes miners go down too. Cash is king and nothing else. This crap about miners being hedges for market crashes is a falsehood.
3) DUST is down on the weekly 12 out of the last 13 weeks and this is supposed to go on indefinitely?
4) DUST in the last 3 months has closed over its 20 day moving average ONE time. Not the 200dma or 50dma or even 32dma but the 20 day. 1 time in about the last 3 months and this is supposed to continue indefinitely?
5) DUST's RSI is below 50 every single day for about 3 months and this is supposed to continue indefinitely?
6) GDX's RSI has been above 50 for almost 3 months and this is supposed to continue indefinitely?
7) Gold miners on average have price to earnings ratios of about 60-80. I'm supposed to believe that "smart money" is dumping their other S&P stocks because they are "over-valued" because the S&P has a P/E of about 20 or so, so "smart money" is dumping the S&P (at P/E of 20) so they can jump into a sector with a P/E of 60-80?
8) Miner sector just had its best quarter in decades and this is supposed to continue indefinitely? No corrections, no decent pullbacks, no filling of gap ups everywhere, just going to go straight up huh? Hey miners are up about 100% this year, heck with it why not 200% or 400%, why not 1000%? Lets shoot to the moon! Lets give miners a earnings ratio of 300 or something insane, why not huh?
9) What the heck would anyone care about a reverse split on DUST. Reverse splits only effect the mind of a rookie. If there is no dilution present (and there isn't because this isn't that sort of thing with toxic warrants or convertible notes like OTCs or some of the bios in Nasdaq) then who gives a darn?
10) If a reverse split really bothers you (which would just be plain stupid) then how many has NUGT had in the past?
11) 90% of the babble on message boards concerning miners is extremely optimistic and "smart money" always agrees with message board posters right? I never knew that "smart money" was the herd.
If all of this is the case and this is the thinking and logic of "smart money" then I am happily taking the other side of the trade because "smart money" sure is acting irrational and herd like to me.
Knowledge + risk taking = prosperity
