The two largest gold miner ETFs GDX and GDXJ are beginning to rally big even with the Dow down today by 2,177.40 or 9.39% to 21,008.22! We believe gold miners bottomed on Friday and will make a major upward explosion in the upcoming weeks while the rest of the market falls another 40%.
During the 2008/2009 financial crisis, gold miners bottomed in October 2008 and doubled in value before the rest of the market finally bottomed in March 2009. All leverage has already been removed from gold mining stocks but major leverage still exists in NASDAQ technology stocks.
At this past Friday's close of trading for the first time in history, the assets under management of the 3X Leveraged Bearish Junior Gold Miners ETF (JDST) were higher than the assets under management of the 3X Leveraged Bullish Junior Gold Miners ETF (JNUG). This means leverage in junior gold mining stocks has actually become net negative and we will actually begin to see late in the day 3:30PM upward explosions in junior gold mining stocks as a result of JDST being forced to unwind its leveraged short positions in GDXJ, which will cause junior gold mining stocks to see their largest upward explosion in history!