The reason I split the GDX/GLD position in to two assets, but essentially the size and risk management of 1 position is because I felt there could be some rotation and GLD could act out on its own separate from GDX, despite the high level of correlation and to do so based on QE.
Higher GLD doesn't really seem to fit with possible tapering sooner than later and the NFP print today was the bridge toward that possibility.
However the bottom line as to why I'm leaving GDX intact and not adding to it is GLD simply has signals that are really standing out, GDX does not have the same type of signals today and I don't want to increase the position size here without a very objective reason why.
Is interest rates about to start going up?
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Yes, I know - it does not make any sense - FED is about to cut
rates...but....real world interest rates are not always what FED wants it
to be.
5 years ago
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