NUGT urgent update...

originally published Thursday, March 26, 2020

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A subscriber has forwarded me an explanation for the strange underperformance by NUGT in recent days, which is reproduced below…

"Due to significant market disruption and volatility on March 24, 2020, the Direxion Daily Gold Miners Index Bull 3X Shares (NUGT) and Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG) will not have exposure of 300% to the market today. At market open, the Direxion Daily Gold Miners Index Bull 3X Shares and Direxion Daily Junior Gold Miners Index Bull 3X Shares will have exposure of approximately 220% and 220%, respectively. This reduced exposure is for today, March 25, 2020, only.”

Also, from another subscriber…

“I called Direxion and asked about this. The said they can't (won't?) handle 3X due to market conditions. The estimated leverage for today is 2.6X. Starting sometime in May they will be permanently changing NUGT and JNUG to 2X.”

We have a limited profit in this (about 8%) at the time of writing which could disappear in a flash if the sector reverses, as attitudes toward this ETF may have been adversely affected by these developments. TAKE PROFITS IMMEDIATELY AND AVOID THEREAFTER.

Posted at 9.55 am EDT on 26th March. NUGT at $9.96.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.