<< <i>Huevos being served, over easy or hard boiled.
Could be capitulation, but at this point it's officially a falling knife, don't trade without a tourniquet. >>
I mercifully stopped myself out of this losing trade ( ouch) a dollar ago BUT I'm tempted to jump back in the pool. Gold did breakdown through a key technical level so........
Mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Derryb, at least one of your statements is on the mark, but the other one? >>
Oh, I get it. I just don't understand from where you get it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Huevos being served, over easy or hard boiled.
Could be capitulation, but at this point it's officially a falling knife, don't trade without a tourniquet. >>
I mercifully stopped myself out of this losing trade ( ouch) a dollar ago BUT I'm tempted to jump back in the pool. Gold did breakdown through a key technical level so........
Mark >>
Being able to cut your losses is the most valuable trait of a good investor.
I agree it looks tempting, I am looking at GDX, but there is no technical floor right now, being a bit chicken, will probably wait for a rebound then look at a retest, if it comes.
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Bought some more. Average in at $3.92. May the force be with me
mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Bought some more. Average in at $3.92. May the force be with me
mark >>
Is that the reason why silver continues to drop? The "force" left you as soon as you placed your bet. >>
Ya, no kidding : )
no mercy
mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Leveraged commodity etfs...a losing trade. Contango contango contango. Who has the huevos to step into GASL? I wish I traded less...I have been long equities, with some good trades on individual stocks and other losing ones. I wish I started shorting TVIX a year ago...
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
<< <i>Leveraged commodity etfs...a losing trade. Contango contango contango. Who has the huevos to step into GASL? I wish I traded less...I have been long equities, with some good trades on individual stocks and other losing ones. I wish I started shorting TVIX a year ago... >>
What am I missing here? Leveraged commodity etf's are a losing trade? That's a legitimate opinion over the long haul as they all tend to head towards zero due to decay.
But playing with TVIX is ok? Down from 126,000 to 5.91 in 3 years. Everything does look "easy" in hindsight though.
It isn't really playing when you consider the leverage and contango-plus the fact that the stock market tends to run higher over time, and VIX etfs decline when stocks go higher...you are missing nothing.
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
<< <i>It isn't really playing when you consider the leverage and contango-plus the fact that the stock market tends to run higher over time, and VIX etfs decline when stocks go higher...you are missing nothing. >>
Good to know there's "sure" money out there. Then it should be a good trade to short TVIX over the next couple of years and take advantage of the rising stock market.
<< <i>It isn't really playing when you consider the leverage and contango-plus the fact that the stock market tends to run higher over time, and VIX etfs decline when stocks go higher...you are missing nothing. >>
Good to know there's "sure" money out there. Then it should be a good trade to short TVIX over the next couple of years and take advantage of the rising stock market. >>
Yep...in 10 years from now, VIX etfs will almost certainly be down at least 90% from now...and the stock market should be higher than where it is now. If the stock market declines 20% or what have you, then VIX etfs will obviously spike, and if you don't have enough cash in your brokerage account you might be screwed with a margin call, but as soon as the stock market gets back to where it was and ties its last high, VIX etfs will be down considerably from where they were at the last high...it is called leverage and contango.
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
Should there be a spike in VIX etfs any time soon, I fully stand by my comments. These horrible etfs sometimes spike because of share counts/trading demand or pullbacks in the market...but in the end, these are just terrible, terrible, tickers to be long and great tickers to be short. In the future I plan on initiating a short position in one or more of these ETFs...
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
<< <i>Leveraged commodity etfs...a losing trade. Contango contango contango. Who has the huevos to step into GASL? I wish I traded less...I have been long equities, with some good trades on individual stocks and other losing ones. I wish I started shorting TVIX a year ago... >>
What am I missing here? Leveraged commodity etf's are a losing trade? That's a legitimate opinion over the long haul as they all tend to head towards zero due to decay.
But playing with TVIX is ok? Down from 126,000 to 5.91 in 3 years. Everything does look "easy" in hindsight though. >>
It wasn't 126,000 3 years ago...only due to reverse splits does the "initial" price seem higher. There are still infinite potential losses from here on out in these ETFs along with their impending reverse splits.
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
The so-called "starting price" of these ETFs when the chart begins is going to keep going higher. They will continue to be multiplied retroactively due to reverse splits.
Positive BST transactions with Timbuk3, coindeuce, charlottedude.
<< <i>....It wasn't 126,000 3 years ago...only due to reverse splits does the "initial" price seem higher. There are still infinite potential losses from here on out in these ETFs along with their impending reverse splits. >>
For appreciation/depreciation that 126,000 is correct. That's a 1 to 21,320 decline. Ok. So let's assume there was a total of 1,000 -1 inverse split(s) along the way. So it's gone from $126 to 0.6 cents. Does that work for you? In the world of trading, 1/21,320 is essentially an "infinite" decline. You have 6/10ths of a cent left. Invest it wisely. Aren't derivatives fun?
Bought some more. Average in at $3.92. May the force be with me
mark >>
sold at an average of $3.99 for a small percentangegain. I didn't want to hold overnight. I had the weight of two trading accounts behind this and the risk was to much.
Mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
No and I stated so in this thread with the loss associated with it. This has been a good vehicle for me.
mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Another key level today, GDX low was 13.66.... retest not holding so far now 16.60...still within the ball park of a possible short term bottom, but it has to hold.
Just took a stoopid position for a very short swing in this death spiral..
GDX/NUGT at LOD. If you think that 1080 holds it's as good as spot as any to enter.
NUGT @ $3.32 as I type
Mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Good chance for a final panic come Tuesday-Wednesday as we get the confluence of OpEx and FOMC meeting at the end of month. Only question is a lower low or higher low?
Read some interesting cycle work today that back in June was forecasting July 17th as an optimum date for a gold crash into this 3 year commodity drop....it missed by only a few trading hours. And the recovery ideally by the 24th, or worst case, end of the month. Let's see how good those multi-year cycles hold up. Was also surprised at their work on 11 year silver lows (1971, 1982, 1993, 2004, 2015). Between now and October 1st a lot of these cycle guys are forecasting big swings to occur. Armstrong's date of October 1st marks the 4.3 yr peak in economic confidence off the 2011 lows. The next 8.6 years will be interesting as confidence falls backwards. The simple answer says it should all help PMs, miners, silver, etc. The other answer is that the banksters still have their foot on the throat of the commodity markets. JPM's addition of $4 TRILL in commodity derivatives only exacerbated the situation. They can stretch this out for as long as their influence holds up.
Would have been close to stopped out in the early AM if the market was open, slight recovery, still hanging by a thread. Interesting when looking at an index trading at multi year lows, It always look cheap...there in lies the rub ;~
I am not the biggest fan of every post from Raw Team, but honor is due. This NUGT ETF has been an unmitigated disaster, even for short term day trades. I have been lucky to not be long in this ETF (except once) and i was able to get my money back. So Raw Team, good call on gold and NUGT.
<< <i>Someone smarter than me should post a 30 year ratio chart of the XAU vs SP-500. Now thats interesting. >>
You think we could retest the 97 lows in this ratio?[/]
It already 30% below. >>
I see that, I pulled up a chart, which I thought was current..but it was actually 10 years old. LOL!
Back to this gawd awful ETF.. I was within a few pennies of getting stopped out on my trade. I guess as of now I'm glad? Of course, it will probably gap down on Monday morning at the opening and I'll wish I was ;~
<< <i>I am not the biggest fan of every post from Raw Team, but honor is due. This NUGT ETF has been an unmitigated disaster, even for short term day trades. I have been lucky to not be long in this ETF (except once) and i was able to get my money back. So Raw Team, good call on gold and NUGT. >>
Not exactly true on the short term trades. You have to be nimble on the 1m and 5 m charts but this can be traded with success. It just went up over 20% in a matter of minutes. Catch most of that move and you can have a good DT month in 5 minutes with size.
On this trade particular trade you had to trust that 1080 gold would hold. It did........this time
Mark
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I am not the biggest fan of every post from Raw Team, but honor is due. This NUGT ETF has been an unmitigated disaster, even for short term day trades. I have been lucky to not be long in this ETF (except once) and i was able to get my money back. So Raw Team, good call on gold and NUGT. >>
Are you blaming NUGT directly or miners (ie GDX)? Because there's a piece missing here. You have to pick your windows for NUGT...and DUST. A 49 day downtrend with minimal retraces along the way is not the ideal window if you get my drift.....lol.
Not many people were figuring on a 38.2%/10 week decline in GDX from the May highs. But that's what it did. Note that it is a perfect FIB decline. What does a 3X NUGT do in that case? It falls 3X faster or (.618) cubed = 23.6% left of the orig amount w/o decay. As terrible as that is, it's not NUGT's fault.
So how much did NUGT decay during a fairly steady and straight drop? It retained a SURPRISING 21.56% of its "value." So the decay over those 49 trading days was about 8.65% of the orig amount...or approx 1% per week. So if you're swinging for the fences, risking 1% per week of decay for an ETF that can often swing 10-30% in one day, that decay is very livable (even in DUST). The best 2 month return I've ever seen for NUGT during 2012-2014 showed "reverse" decay and rose 3.8X....making it almost a 4X ETF. It did happen.
From my experiences with NUGT, this recent downtrend was actually a very good "net" showing with limited and manageable decay. But as always, find me a person who went long NUGT in mid-May, and hung on until today. I suspect the reasonable decay was that the drop was mostly straight down with little whipsawing. Fwiw, when NUGT was first introduced in late 2010, it had 0% decay for its first 9 months. I think they've reworked it a bit to skim more off the top.
So the problem with this big decline since May has almost NOTHING to do with NUGT and its decay....and nearly EVERYTHING to do with GDX and miners being crushed. Had you simply bought 3X the amount of GDX back in May and held on, you'd be down only 8.65% less than the guy who bought NUGT with 1/3 of the cash.
Fwiw, the decay on DUST is much worse than NUGT. Here's a good example. From Oct 2012 to start of January 2015 GDX was crushed from $55 to $20 (2.75X factor). NUGT should have gone down 20X in that period. As it was it did a lot worse and was down around 80X. That's a 4-1 over-reach due to decay. DUST during that period should have rallied 20X if decay were not involved. Yet, DUST was dead flat during that 2-1/4 year period. So a 5-1 worse decay factor than NUGT. Discussing the decay of NUGT vs. DUST is no different than discussing which fiat currency is falling faster than the others in any particular time period on their way to 0. They are lose-lose given enough time.
DUST-buster....7 large whipsaws on the way down in 2013-2014 toasted DUST.
DUST peaking pattern last Oct-Nov quite similar to this week's ...5-6 days higher to the peaks following the last strong gap up/breakout. The high today was 1.98X above the 200 dma. Back in November it reached 2.26X. Interesting that the 2 previous 50/200 dma crosses were close to peaks/bottoms, but opposite to standard "wisdom." 50 dma is coming up fast towards the 200 dma.....another golden cross top?
Don't believe this because ZH posted it. But considering the source documents are available below, it's actually true. In fact, hedge funds went net short gold futures last week at 108K long vs. 109K short. This week they piled on another net 12K in gold shorts (as of Tuesday). Even the small specs have moved into a 20% net short gold futures position. It's getting hard to tell the commercials from the specs....lol.
Should be helpful to NUGT fans. Hedge funds are even more short silver futures (37% net short).
Even though I have waded in the dark pool on occasion with NUGT and other leveraged ETFs..all of that money is speculative and not an investment. I agree, in the long run you are better selling the rips and profiting with the house than betting against it, but shorting and buying puts on this is difficult and costly, so nothing is easy. RR makes a reasonable point that the decay is not horrible for short periods of time, and I agree, but even in his example over a 49 day period GDX with triple the capital, which is a opportunity cost, but the GDX outperformed NUGT by 8.6%...which is a lot to me and I think to most. Trading is a very difficult proposition as it is, without the decay. Even with short holding periods, the added variance overtime is real and it will have a negative impact. It has to
This board has some individuals that probably have a much better chance of making money in the area of mining stocks and PMs, because their knowledge is more comprehensive, then there are some that are probably above average at trading, so there would appear to be some positive biases, that may be misleading, but overtime it's still a losing proposition for the vast majority of folks and it always will be. GDX may have some real longterm value for investors who scale in, which is something NUGT can never have.
Back to the real question...Did GDX make a short term, bottom? or just a pause before the beatdown continues?
<< <i>...but the GDX outperformed NUGT by 8.6%...which is a lot to me and I think to most. Trading is a very difficult proposition as it is, without the decay. >>
Here's an interesting break down of that 49 day drop in NUGT and GDX. No one here would have considered NUGT for a multi-week trade anywhere near close to the mid-May top. But 25 days later there was some life to the thread as Nugt had fallen 33%. I'd have expected relatively equal decay in the 2 legs of this move. Not so. The first 25 days down only produced a tiny 1.2% decay vs. GDX (.05%/day) But the next 24 days produced another 8.3% of decay. 96% of the total decay came in the last half of the move. So extreme drops in short periods, boost the decay.
And in breaking it down further, the first 25 days was 1.2% decay. At day 43 is was 3.4% total decay. On day 45 it was 8.2%. So half the total decay in this 49 day move, came during the 2 largest down days (days 44-45). Time and depth are the 2 biggest killers.
During the last several NUGT rallies of 30-50 days I found that it had decay of from 3-6%. That variation is due to how many steep dips occurred along the way. One could consider NUGT a 2.8X or 2.9% ETF on rallies. During this 49 day decline, NUGT was nearly a 3.3X ETF, accentuating the loss. DUST showed even more decay that NUGT. It's 49 day rise showed 14% decay....60% more than NUGT.
Comments
<< <i>Huevos being served, over easy or hard boiled.
Could be capitulation, but at this point it's officially a falling knife, don't trade without a tourniquet. >>
I mercifully stopped myself out of this losing trade ( ouch) a dollar ago BUT I'm tempted to jump back in the pool. Gold did breakdown through a key technical level so........
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Derryb, at least one of your statements is on the mark, but the other one?
Oh, I get it. I just don't understand from where you get it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Especially if margins increase or the competition can't match your price.
It's so simple, even a banker can understand it.
I knew it would happen.
<< <i>
<< <i>Huevos being served, over easy or hard boiled.
Could be capitulation, but at this point it's officially a falling knife, don't trade without a tourniquet. >>
I mercifully stopped myself out of this losing trade ( ouch) a dollar ago BUT I'm tempted to jump back in the pool. Gold did breakdown through a key technical level so........
Mark >>
Being able to cut your losses is the most valuable trait of a good investor.
I agree it looks tempting, I am looking at GDX, but there is no technical floor right now, being a bit chicken, will probably wait for a rebound then look at a retest, if it comes.
<< <i>Yes of course, companies that sell 25% more at 1/3 the price enjoy a long and profitable existance. Lol
Especially if margins increase or the competition can't match your price.
It's so simple, even a banker can understand it. >>
Lol. I hope you change the batteries in your calculator.
Knowledge is the enemy of fear
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Huevos!
I knew it would happen.
<< <i>Long at $3.97..................Mark
Huevos! >>
Bought some more. Average in at $3.92. May the force be with me
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>
<< <i>Long at $3.97..................Mark
Huevos! >>
Bought some more. Average in at $3.92. May the force be with me
mark >>
Is that the reason why silver continues to drop? The "force" left you as soon as you placed your bet.
<< <i>At least a 1 for 10 ...or even a 1 for 20 reverse split should occur any day now... >>
Agree, they have already waited to long, imo
<< <i>
<< <i>
<< <i>Long at $3.97..................Mark
Huevos! >>
Bought some more. Average in at $3.92. May the force be with me
mark >>
Is that the reason why silver continues to drop? The "force" left you as soon as you placed your bet.
Ya, no kidding : )
no mercy
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Leveraged commodity etfs...a losing trade. Contango contango contango. Who has the huevos to step into GASL? I wish I traded less...I have been long equities, with some good trades on individual stocks and other losing ones. I wish I started shorting TVIX a year ago... >>
What am I missing here? Leveraged commodity etf's are a losing trade? That's a legitimate opinion over the long haul as they all tend to head towards zero due to decay.
But playing with TVIX is ok? Down from 126,000 to 5.91 in 3 years. Everything does look "easy" in hindsight though.
<< <i>It isn't really playing when you consider the leverage and contango-plus the fact that the stock market tends to run higher over time, and VIX etfs decline when stocks go higher...you are missing nothing. >>
Good to know there's "sure" money out there. Then it should be a good trade to short TVIX over the next couple of years and take advantage of the rising stock market.
<< <i>
<< <i>It isn't really playing when you consider the leverage and contango-plus the fact that the stock market tends to run higher over time, and VIX etfs decline when stocks go higher...you are missing nothing. >>
Good to know there's "sure" money out there. Then it should be a good trade to short TVIX over the next couple of years and take advantage of the rising stock market. >>
Yep...in 10 years from now, VIX etfs will almost certainly be down at least 90% from now...and the stock market should be higher than where it is now. If the stock market declines 20% or what have you, then VIX etfs will obviously spike, and if you don't have enough cash in your brokerage account you might be screwed with a margin call, but as soon as the stock market gets back to where it was and ties its last high, VIX etfs will be down considerably from where they were at the last high...it is called leverage and contango.
Investing for dummies, by a dummy...
<< <i>
<< <i>Leveraged commodity etfs...a losing trade. Contango contango contango. Who has the huevos to step into GASL? I wish I traded less...I have been long equities, with some good trades on individual stocks and other losing ones. I wish I started shorting TVIX a year ago... >>
What am I missing here? Leveraged commodity etf's are a losing trade? That's a legitimate opinion over the long haul as they all tend to head towards zero due to decay.
But playing with TVIX is ok? Down from 126,000 to 5.91 in 3 years. Everything does look "easy" in hindsight though. >>
It wasn't 126,000 3 years ago...only due to reverse splits does the "initial" price seem higher. There are still infinite potential losses from here on out in these ETFs along with their impending reverse splits.
<< <i>You should write book hop....
Investing for dummies, by a dummy... >>
How insightful. You are the resident expert on investing. Let's reexamine these VIX etfs in 10 years and see who is the dummy.
I knew it would happen.
Too many positive BST transactions with too many members to list.
<< <i>....It wasn't 126,000 3 years ago...only due to reverse splits does the "initial" price seem higher. There are still infinite potential losses from here on out in these ETFs along with their impending reverse splits. >>
For appreciation/depreciation that 126,000 is correct. That's a 1 to 21,320 decline. Ok. So let's assume there was a total of 1,000 -1 inverse split(s) along the way. So it's gone from $126 to 0.6 cents. Does that work for you? In the world of trading, 1/21,320 is essentially an "infinite" decline. You have 6/10ths of a cent left. Invest it wisely. Aren't derivatives fun?
<< <i>
<< <i>Long at $3.97..................Mark
Huevos! >>
Bought some more. Average in at $3.92. May the force be with me
mark >>
sold at an average of $3.99 for a small percentangegain. I didn't want to hold overnight. I had the weight of two trading accounts behind this and the risk was to much.
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Knowledge is the enemy of fear
<< <i>Are you still holding at $7? >>
No and I stated so in this thread with the loss associated with it. This has been a good vehicle for me.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Knowledge is the enemy of fear
Just took a stoopid position for a very short swing in this death spiral..
I have a very short stop..very
NUGT @ $3.32 as I type
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Read some interesting cycle work today that back in June was forecasting July 17th as an optimum date for a gold crash into this 3 year commodity drop....it missed by only a few trading hours. And the recovery ideally by the 24th, or worst case, end of the month. Let's see how good those multi-year cycles hold up. Was also surprised at their work on 11 year silver lows (1971, 1982, 1993, 2004, 2015). Between now and October 1st a lot of these cycle guys are forecasting big swings to occur. Armstrong's date of October 1st marks the 4.3 yr peak in economic confidence off the 2011 lows. The next 8.6 years will be interesting as confidence falls backwards. The simple answer says it should all help PMs, miners, silver, etc. The other answer is that the banksters still have their foot on the throat of the commodity markets. JPM's addition of $4 TRILL in commodity derivatives only exacerbated the situation. They can stretch this out for as long as their influence holds up.
Knowledge is the enemy of fear
It always look cheap...there in lies the rub ;~
<< <i>Someone smarter than me should post a 30 year ratio chart of the XAU vs SP-500. Now thats interesting.
You think we could retest the 97 lows in this ratio?
Liberty: Parent of Science & Industry
Too many positive BST transactions with too many members to list.
<< <i>NUGT at 3.12 at this time. >>
Yep up 10% again...
<< <i>
<< <i>Someone smarter than me should post a 30 year ratio chart of the XAU vs SP-500. Now thats interesting.
You think we could retest the 97 lows in this ratio?[/]
It already 30% below.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Someone smarter than me should post a 30 year ratio chart of the XAU vs SP-500. Now thats interesting.
You think we could retest the 97 lows in this ratio?[/]
It already 30% below. >>
I see that, I pulled up a chart, which I thought was current..but it was actually 10 years old. LOL!
Back to this gawd awful ETF.. I was within a few pennies of getting stopped out on my trade. I guess as of now I'm glad?
Of course, it will probably gap down on Monday morning at the opening and I'll wish I was ;~
<< <i>I am not the biggest fan of every post from Raw Team, but honor is due. This NUGT ETF has been an unmitigated disaster, even for short term day trades. I have been lucky to not be long in this ETF (except once) and i was able to get my money back. So Raw Team, good call on gold and NUGT. >>
Not exactly true on the short term trades. You have to be nimble on the 1m and 5 m charts but this can be traded with success. It just went up over 20% in a matter of minutes. Catch most of that move and you can have a good DT month in 5 minutes with size.
On this trade particular trade you had to trust that 1080 gold would hold. It did........this time
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I am not the biggest fan of every post from Raw Team, but honor is due. This NUGT ETF has been an unmitigated disaster, even for short term day trades. I have been lucky to not be long in this ETF (except once) and i was able to get my money back. So Raw Team, good call on gold and NUGT. >>
Are you blaming NUGT directly or miners (ie GDX)? Because there's a piece missing here. You have to pick your windows for NUGT...and DUST. A 49 day downtrend with minimal retraces along the way is not the ideal window if you get my drift.....lol.
Not many people were figuring on a 38.2%/10 week decline in GDX from the May highs. But that's what it did. Note that it is a perfect FIB decline. What does a 3X NUGT do in that case? It falls 3X faster or (.618) cubed = 23.6% left of the orig amount w/o decay. As terrible as that is, it's not NUGT's fault.
So how much did NUGT decay during a fairly steady and straight drop? It retained a SURPRISING 21.56% of its "value." So the decay over those 49 trading days was about 8.65% of the orig amount...or approx 1% per week. So if you're swinging for the fences, risking 1% per week of decay for an ETF that can often swing 10-30% in one day, that decay is very livable (even in DUST). The best 2 month return I've ever seen for NUGT during 2012-2014 showed "reverse" decay and rose 3.8X....making it almost a 4X ETF. It did happen.
From my experiences with NUGT, this recent downtrend was actually a very good "net" showing with limited and manageable decay. But as always, find me a person who went long NUGT in mid-May, and hung on until today. I suspect the reasonable decay was that the drop was mostly straight down with little whipsawing. Fwiw, when NUGT was first introduced in late 2010, it had 0% decay for its first 9 months. I think they've reworked it a bit to skim more off the top.
So the problem with this big decline since May has almost NOTHING to do with NUGT and its decay....and nearly EVERYTHING to do with GDX and miners being crushed. Had you simply bought 3X the amount of GDX back in May and held on, you'd be down only 8.65% less than the guy who bought NUGT with 1/3 of the cash.
Fwiw, the decay on DUST is much worse than NUGT. Here's a good example. From Oct 2012 to start of January 2015 GDX was crushed from $55 to $20 (2.75X factor). NUGT should have gone down 20X in that period. As it was it did a lot worse and was down around 80X. That's a 4-1 over-reach due to decay. DUST during that period should have rallied 20X if decay were not involved. Yet, DUST was dead flat during that 2-1/4 year period. So a 5-1 worse decay factor than NUGT. Discussing the decay of NUGT vs. DUST is no different than discussing which fiat currency is falling faster than the others in any particular time period on their way to 0. They are lose-lose given enough time.
DUST-buster....7 large whipsaws on the way down in 2013-2014 toasted DUST.
DUST peaking pattern last Oct-Nov quite similar to this week's ...5-6 days higher to the peaks following the last strong gap up/breakout. The high today was 1.98X above the 200 dma. Back in November it reached 2.26X. Interesting that the 2 previous 50/200 dma crosses were close to peaks/bottoms, but opposite to standard "wisdom." 50 dma is coming up fast towards the 200 dma.....another golden cross top?
Don't believe this because ZH posted it. But considering the source documents are available below, it's actually true. In fact, hedge funds went net short gold futures last week at 108K long vs. 109K short. This week they piled on another net 12K in gold shorts (as of Tuesday). Even the small specs have moved into a 20% net short gold futures position. It's getting hard to tell the commercials from the specs....lol.
Should be helpful to NUGT fans. Hedge funds are even more short silver futures (37% net short).
CFTC COT
Because the price won't go to zero and the shorts will have to cover at some point?
I knew it would happen.
This board has some individuals that probably have a much better chance of making money in the area of mining stocks and PMs, because their knowledge is more comprehensive, then there are some that are probably above average at trading, so there would appear to be some positive biases, that may be misleading, but overtime it's still a losing proposition for the vast majority of folks and it always will be. GDX may have some real longterm value for investors who scale in, which is something NUGT can never have.
Back to the real question...Did GDX make a short term, bottom? or just a pause before the beatdown continues?
<< <i>...but the GDX outperformed NUGT by 8.6%...which is a lot to me and I think to most. Trading is a very difficult proposition as it is, without the decay. >>
Here's an interesting break down of that 49 day drop in NUGT and GDX. No one here would have considered NUGT for a multi-week trade anywhere near close to the mid-May top. But 25 days later there was some life to the thread as Nugt had fallen 33%. I'd have expected relatively equal decay in the 2 legs of this move. Not so. The first 25 days down only produced a tiny 1.2% decay vs. GDX (.05%/day) But the next 24 days produced another 8.3% of decay. 96% of the total decay came in the last half of the move. So extreme drops in short periods, boost the decay.
And in breaking it down further, the first 25 days was 1.2% decay. At day 43 is was 3.4% total decay. On day 45 it was 8.2%. So half the total decay in this 49 day move, came during the 2 largest down days (days 44-45). Time and depth are the 2 biggest killers.
During the last several NUGT rallies of 30-50 days I found that it had decay of from 3-6%. That variation is due to how many steep dips occurred along the way. One could consider NUGT a 2.8X or 2.9% ETF on rallies. During this 49 day decline, NUGT was nearly a 3.3X ETF, accentuating the loss. DUST showed even more decay that NUGT. It's 49 day rise showed 14% decay....60% more than NUGT.