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

[jboatswain]

Manipulation is everywhere. When stock market crashes, expect Plunge Protection Team to step in and buy the futures. Nothing to bemoan about. However, there comes a time where all these efforts go in vain.

I am looking at monthly charts of GDXJ, GOLD and JNUG. If you look from 07/15 to 01/16. GDXJ and GOLD were bottoming out. GDXJ was between 24 and 20, Gold between 1170 and 1050. JNUG was between 9 and 4.

It was so easy for investors to hold GDXJ and GOLD during those 6 months, compared to JNUG, which lost 100%, whereas GDXJ lost 20%, GOLD lost 10%.

-100% JNUG = -20% GDXJ = -10% GOLD then.

If we look at 02/16-07/16, you see a diff story

840% JNUG = 160% GDXJ = +30% GOLD

From 08/16 to 12/16:

-86 % JNUG = -40% GDXJ = -18% GOLD

The thesis that Hedgefunds manipulating GOLD/GDXJ is very WEAK. What happened then? Miners moved ahead and did not fall enough (like -40%) during the pullback. That's why GDXJ/JNUG is not moving.

This phenomenon is not unique to gold, GDXJ alone. It happened with many shale oil companies. Last year, many companies moved like 500%; during the pullback or OPEC issues, these companies stock price did not fall much, so many riding up oil did not get the uptrend value they wanted.

Now we know the difference between 20% pullback and a bear market: pullbacks are quick, and may take 5 months time, so the old longs don't sell their holdings for 20% pullback. Gold bear market lasted 5 years, which forced 99% of GDXJ longs to get rid of their holdings. So, during the next bull run, one can reap those 160% GDJ, 840% JNUG moves.