Some Strange Trading Is Now Happening With The GDX ETF – Mike Swanson (07/16/2019)

I was watching CNBC for five minutes Monday around noon and saw a talking head on there mention the idea of buying gold as diversification in a market in which interest rates are falling.

This is the first time I have seen someone on CNBC come out and recommend gold.

He is right, but one of the regular CNBC people laughed at the idea.

But something funny is happening with the trading in gold ETF’s I have yet to see anyone notice.

Now I know that the CNBC laughter is a simple reflection of the audience that watches that channel as the masses have ZERO interest in gold, much less mining stocks.

For instance right now on Robinhood there is not a single mining stock or ETF in the list of the top 100 owned stocks or funds on there among account holders.

Take a look at this – here is a screen shot showing the number of individual people that own various gold ETF’s with Robinhood Accounts.

Only 4,065 people on Robinhood own GDX.

As you can see I am one of them as I own 87 shares with my Robinhood Account (it’s a play account for me as I actually own thousands of shares in my IRA).

Not many more on there own GLD or IAU either.

Its a sad situation the masses are in as they are missing out.

In contrast over 492,000 people own dope stock ACB (which is a fun one), but over 219,000 people own dead money stock market laggard Apple.

Some 17,000 people own Luckin Coffee trying to gamble on the IPO.

When you see those numbers you see how few small players are interested in gold or gold stocks in the markets now.

Two years ago in 2016 you’d see some of the gold ETF’s and even a few gold stocks in the top 100 list for Robinhood on any given day, but not today.

And yet something funny is happening as yesterday GDX was the 4th most actively traded ETF on the NYSE doing over 21.1 million shares in volume!

So if very few individual people are trading GDX then who is?

Here is an oddity – GDX has a $10 billion dollar market cap and did over $540 million in trading volume yesterday. That means that about 5% of its shares turned over and that happens with it every single day.

That’s a fast turnover for an ETF and it tells us that hedge fund computer trading robots are involved.

This means a few things.

First of all trading robots have had a huge influence in ETF’s like SPY helping them to go up with zero volatility for years with very few pullbacks.

They are starting to come into GDX and the other gold ETF’s and are likely to have a similar influence on them – although the small cap mining stocks are too small to be impacted by computer robots.

And secondly there is a reason why they are now getting into gold more than ever.

And it’s something that is very important for you to understand if you are in the markets at all.

You need to know why this is happening.

I’ll talk about that with you tomorrow.

On Monday I also posted up an interview I did of silver expert David Morgan in which we talked about why silver is lagging gold at this moment.

You can listen to it here.

BTW my top stock pick KL went up another 3.31% yesterday.

I talked about it with you the other week and it just broke out to a new high yesterday!

Now I own KL and I don’t really like to buy stocks at new highs, but in my private Power Investor group in my update for this week I talked about another stock that has not broken out to a new 52-week high yet and is consolidating right below long-term resistance in the 10 cents area at a great buy point.

I think it’s going to go crazy for months once it clears it and is why you need to get into the group!

To do so go here:

https://wallstreetwindow.com/join-power-investor/

-Mike



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