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Direxion Shares Exchange Traded Fund Trust Up 300% This Year As Gold Soars

The Direxion Daily Gold Miners Index Bull 3x Shares ETF (NYSEARCA: NUGT ) as on a high-powered flight on Thursday as it shot to an intraday trading high of $101.29. The ETF later settled with gains of 13.25% at $99.90 – by then, the market had already made its point, gold is on the rise and there’s not much you can do to stop its ascent. The yellow metal has been on a bullish ascent since Monday and Thursday marks the fourth straight session of gains. The reasons behind the rally in the bullion markets are not farfetched. High on the bullish factors supporting a rally in the yellow metal is the fact that the U.S. Federal Reserve did not raise interest rates in April and the first rate hike might not happen until June. The second reason for the rally was the fact that the Bank of Japan has surprised the global market by keeping its interest rate unchanged in sharp contrast to expectations that BOJ would retreat deeper into negative territory. Gold climbs for fourth straight session The decision of the fed to keep interest rates unchanged, its cautious stance, and the refusal of the BOJ to weaken the Yen has forced the U.S. dollar to fall lower. A weak dollar often boosts the prospects of gold and the yellow metal is milking all the gains in the greenback for what it is worth. On Thursday, spot gold climbed 1.6% to settle at $1,266.50 an ounce and gold for June delivery gained 1.6% to close at $1.266.50 an ounce. In the year-to-date period, the yellow metal has gained 17.14% to erase the losses that it recorded in 2015. NUGT has gained a massive 310.6% in the year-to-date. The rally in gold slowed down at the start of the second quarter – in the last one month, the yellow metal has gained 1.70% and Thursday’s gains records the highest closing price in the bullion since March 10. It is worthy of note that analysts seem to think that gold had reached a bottom last year and that the rally will continue for much of this year. For instance, George Milling-Stanley, strategist at State Street Global Advisors notes that “in the continued absence of any surprises from policy makers, the gold price could still see further gains in 2016… A price of around $1,350 by year-end could be sustainable.” Nonetheless, I wouldn’t be surprised if the yellow metal runs into occasional volatility that pull the price down. Crude oil also benefits from weaker dollar The weaker dollar has lifted gold and NUGT – but it is also lifting crude oil in global trade. Yesterday, crude oil had more reasons to climb partly because the prospects of a production freeze by OPEC and Russia looks brighter and partly because the BOJs economic policy has weakened the dollar. U.S. West Texas Intermediate (WTI) Futures gained 1.5% to settle at $46.03 and Brent crude gained $0.93 to $48.11 per barrel nearing its highest point since November last year. Dominick Chirichella, a senior partner at the Energy Management Institute observes “the perception view crowd are starting to call the oil market rally the beginning of what will be a long bull market… Clearly, the market is primarily focused on the forward supply-and-demand picture while continuing to push the bearish nearby fundamentals further into the background.” Link to the original post on Learn Bonds

Timely Dow 2 Signal For 2016

The following is from this year’s Note 16 of The Kelly Letter, which went out to subscribers last Sunday morning. The market continues confounding bearish pundits. The Dow Jones Industrial Average closed above 18,000 for the first time since last July, and from its Friday close at 18,005 requires only a 1.5% rise to eclipse its all-time high of 18,272 recorded last May. The year is going well for us, helped along by the strong outperformance of our preferred small- and mid-cap stock sectors in the past two weeks, and I’m already tempted to declare the changes in Tier 3 a success. Our goal there was to reduce the drag of forecasting on the overall portfolio by putting an even larger percentage of capital under the guidance of reactive systems. The two new ones in Tier 3 are Dow 2 and Mo 1, with the speculative portion of the tier reduced to just a fifth of the allocation. Dow 2 sensed the time to move out of Intel ( INTC $31.64) and into Wal-Mart ( WMT $68.72), which has been great. As Intel works to realign itself with a growing emphasis on mobile devices at the expense of personal computers, its stock price is struggling. As Wal-Mart benefits from a turnaround plan that’s farther along and should produce a leaner retailer, its stock price is appreciating. The differential between the two stocks, with INTC down 8.2% and WMT up 12.1%, is a 20.3-point spread. This translates into a significant improvement for us, given our high allocation to the Dow 2 plan. We invested $69,091 in WMT on January 4. It’s now worth $78,478. Had it remained in INTC, which we sold that day at $33.93, it would be worth just $64,427. We’re $14,051 ahead, thanks to the Dow 2 signal. … The last two weeks have provided a convenient case-in-point for why our reactive systems are such a fine way to benefit from the financial markets. They are low-stress and run on autopilot, beating the frantic pros who continue demonstrating their shortcomings with newly failed predictions. I was able to leave the plans alone through a busy schedule that included major earthquakes [in Kumamoto, Japan] as a disruption, and what did I find upon returning? Our money beating the market and therefore most professional money managers. The S&P 500 is up only 3% so far this year. We’re up 5.6%. Even more impressive, unlike most price-only comparisons, these are more accurate total-return comparisons. Stay true to intelligently reactive plans built on decades of market behavior. They are beatable by dumb luck only, which pundits call skill, and which we know to be unreliable. Guessing is best reserved for fun and games, not money management for a better future. In the end, steadily and surely, automated intelligent reaction outdistances professional guessers by a wider and wider margin, while costing far less in fees. Just ask Bill Ackman at Pershing Square, the billionaire hedge fund manager who lost 20.5% last year and another 25% in this year’s first quarter. That’s some bang-up expertise for hire at a high price, eh? No thanks. We’ll stick with what works, and what’s cheap. How convenient that they’re the same thing.