During the latter part of the gold bull market mining stocks failed to keep pace with the yellow metal and have underperformed ever since. Given the bear market that gold is now in, it was clear to us that the mining sector would take a beating. In line with this view we have been making profitable short trades throughout the year on the poor performing sector, and have closed two more this week.
On November 19th we issued a signal to our subscribers, recommending that they buy DUST, an ETF that is triple short the gold mining sector, at $34.45. Once gold broke through $1260, we doubled our position as we allocated another 5% of our portfolio to the trade at $41.60. This meant 20% of our portfolio was allocated to this 3x leveraged ETF.
As the above shows, we did not experience a day when this trade was in anyway losing.
As both gold and the miners tracked lower the profits on both positions grew. With such gains showing and a crucial NFP release around the corner we decided that we would take profits once the HUI broke through 200. Such a break would represent a considerable move downward in the sector, and a weak payrolls figure this Friday could provide a relief rally in gold and gold stocks.
The 200 level was breached towards the end of Monday’s trading period, so we therefore decided to exit the following day. We informed our subscribers that we had close both DUST positions for $50.05, gaining 42.30% on the first trade and 20.33% on the second.
With these two trades closed we have continued our streak of 100% profitable trades through 2013, which is made up of 30 winners averaging 38.49% each.
Our return on the year has also risen to 92.28% and our overall performance to 855.77% since inception.
So, if your portfolio has gained less that 90% this year, then contact us to join our waiting list now!