Goldtent TA Paradise

Thoughts on GDXJ?

1. Swamimeister says:

   April 13, 2017 - 12:29 pm at 12:29 pm

   We’ll probably know within a few days which one saw “it” coming. It is a very large spread between the two and neither is keeping up with the pace of gold. Maybe it’s a gentle rebalancing. A few years ago, I saw TVIX drop around 50% over a couple of days, out of the blue. It was later blamed on rebalancing. TVIX is an ETN and I don’t know if that could happen to an ETF or not. Before that happened, UVXY had very little volume but afterwards TVIX lost it’s customers.

   • YYZ says:

     April 13, 2017 - 5:10 pm at 5:10 pm

     Yes, I was one of those TVIX ‘customers’. Not much wagered but that one experience killed all leveraged ETN’s for me. When the crowd guesses right on direction and magnitude but the ETN gives them the finger – doesn’t build confidence. This experience also soured me on ETF’s in general. I’m sticking with the SpockM out-of-the-collective Jr’s. It’s probably easier to get skinned if you’re in a corral.

2. PK says:

   April 13, 2017 - 1:29 pm at 1:29 pm

   You are right. Just read this on twitter:

   @Bamabroker read my feed on $GDXJ Index Changes announced last night. Will explain why $GDXJ is underperforming so much this am.

3. Dave says:

   April 13, 2017 - 2:26 pm at 2:26 pm

   For the best take on this issue, follow: https://twitter.com/EconomicAlpha

4. JSKauai says:

   April 13, 2017 - 3:42 pm at 3:42 pm

   Dave, good link! thank for that. From your link…”Looks like $GDXJ is loading up on $GFI $TAHO $EGO $PAAS $HL $AUY $SBGL” and indeed they are all up big today with many of the other miners down. It goes to show how these ETF’s are controlling price action in a big way. I have never owned an ETF it is just not my style.

5. Alex33 says:

   April 13, 2017 - 4:02 pm at 4:02 pm

   Sorry, But GDXJ is juniors gold miners so, AUY, HL and PAAS will never be part of it!!!!

6. Swamimeister says:

   April 13, 2017 - 4:20 pm at 4:20 pm

   I think that what can happen is that, because these trade like an individual stock (the price moves up and down by buyers and sellers), the price of the ETF can become out of balance with the price of the securities that it holds. So, periodically, the ETF needs to be rebalanced in that way. So rebalancing can have two meanings.

7. Alex33 says:

   April 13, 2017 - 4:21 pm at 4:21 pm

   Sorry for previous post, but GDXJ includes big cap names is correct:

   http://www.cnbc.com/2017/04/12/how-an-etf-gets-too-big-for-its-index.html

8. Dave says:

   April 13, 2017 - 4:44 pm at 4:44 pm

   More here: https://www.bloomberg.com/news/articles/2017-04-13/vaneck-s-junior-gold-miner-etf-seen-rebalancing-as-assets-soar

   • Dave says:

     April 13, 2017 - 4:45 pm at 4:45 pm

     Luis was 6 hours ahead of Bloomberg.