Today’s Top Volume ETF Is Crazy and Toxic
By Mike Swanson on Wed, 04/20/2016 – 10:47 from: http://wallstreetwindow.com/
Topics: Gold Investing and Gold Stocks
I am writing this at 10:36 AM and the top traded ETF today is an ETF that is killing people.
The symbol is DUST and if you have been trading it you need to stop.
This exchange traded fund is toxic.
It has its role, but unfortunately it is ruining almost everyone who is touching it.
Let me explain.
Look at this chart:
What you are looking at is the DUST ETF and it has done 25 million in shares of trading so far this morning!
This year almost every day it shows up as a top five ETF in terms of shares traded and dollar volume.
You could say a total mania has formed in this ETF and yet all of the ETF has done is go down to kill people buying it.
This ETF a triple short gold stocks ETF.
Gold stocks started a new bull market this year and the GDX ETF is already up over 100% from its January low.
And as I said yesterday silver is in a new bull market too.
People investing in gold stocks and ETF’s are making a lot of money and I believe it is only begun.
And yes I am a GDX owner.
Now DUST people try to trade DUST, because it moves so much it will eat you alive if you hold it and it goes against you.
So some people are trying to pick tops in gold stocks by buying DUST.
And they are failing.
One problem is that people are looking at the commitment of traders reports in the futures market to pick a top.
The thing is these reports no longer work the way they did in the past for gold, because gold is now in a bull market.
As a result the open interest in the gold market is exploding so previous high and low levels in these futures reports no longer are working in picking tops so they are causing people to make mistakes.
The second problem is that people are assuming that because gold has had sharp moves up and so have the gold stocks that they have to fall.
But when bull markets start after huge and long bear markets they often go up without pulling back as much as people expect.
That’s what the US stock market did in 2009 for example.
The reality is that trying to short gold or gold stocks or buy DUST to trade against them is NUTS in this type of market.
In a bull market you want to go with the trend and not against it.
The only way you can use DUST is in conjunction with the minute dip trend or with some sort of computerized robot style quantitative system.
That’s a very tough game to play and DUST trading is proven to me a messy distraction for too many people.
So if you have been trading DUST and losing money than you need to stop it.
And do not feel bad about it, because a lot of people are trying to do it judging by the crazy trading volume it is doing.
Look there is a lot of money to be made in trading and investing in gold, but the best way to make money is to use a simple system.
And that means going with the big trend of a market and not trying to jump and out.
I have created my Total Gold Trading Program to help you learn to do just that.
It also includes as a bonus a 30-day trial to my Power Investor Service.
Each week now I am finding new gold stock ideas and this is now the time to do it.
So to start to take advantage of this new big gold trend go here.