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These 3 ETPs Are Getting Grilled


July 3, 2013
Ron DeLegge, Editor

It’s grilling season, which can only mean one thing: Let’s open the refrigerator and see which ETFs and ETNs are getting slaughtered, marinated, and grilled.

Here are the top three ETPs that are getting grilled on a year-to-date (YTD) basis.

Direxion Daily Gold Miners Bull 3X Shrs (NYSEARCA:NUGT) -90.25% ytd
Although the Great Gold Crash of 2013 (NYSEARCA:GLD) has captured media headlines everywhere, it’s actually gold mining stocks (NYSEARCA:GDX) that have been really getting cooked. Over the past year, gold miners have slid almost 50% in value and are performing substantially worse than physical precious metals (NYSEARCA:GLTR). 

NUGT, which aims for 300% daily leverage to gold miners, has been nuked 90.25% since the beginning of the year.

Interestingly, analysts have been wrongly focused on “cheap” valuations in the mining sector instead of acknowledging the technical direction of gold stock prices which are a leading indicator. 

Watch: Trading Commission Free ETFs the Smart Way  

Back in November 2012, Dennis “The Menace” Gartman told Money News “Gold is Good, but Gold Stocks are Even Better.” That toxic advice, for anyone who took it, has been nothing short of disastrous.

(We told our readers to do the exact reverse. In our Weekly ETF Picks on Feb. 14, we alerted our readers to buy NUGT’s opposite, the Direxion Daily Gold Miners Bear 3x Shrs (NYSEARCA:DUST). And today, it’s no less the #1 performing ETF this year, up an incredible 305%.)

VelocityShares 3x Long Silver ETN (NYSEARCA:USLV) -79.24% ytd
Just like its sibling gold, silver (NYSEARCA:SLV) is in a bear market and prices have fallen 36% over the past six months. And that’s why USLV, which aims for 300% leverage to silver, has been such an awful trade.

At around $5.50 per share, an announcement of a USLV 1-for-5 or 1-for-10 reverse split should be coming any day now.

On May 8, we told our readers to be short silver. Our #timestamped trades from that Weekly ETF Pick resulted in a 10% one-month gain in ZSL and a 290% on SLV put options, which are still open.

VelocityShares Daily 2x VIX ST ETN (NYSEARCA:TVIX) -67.26% ytd
Declining stock market volatility has taken the VIX (^VIX) toward multi-year lows, which has crushed ETF and ETN products like TVIX that are long the VIX with daily leverage.

TVIX may ring a bell, because back in March 2012 it lost around 60% in a matter of just two days. Without getting into the gory details of why TVIX blew up, let’s just say it was a “wardrobe malfunction” by the issuer, Credit Suisse.  

Currently, TVIX, at $2.97, now trades in the same forsaken vicinity as Zynga (NASDAQGS:ZNGA).

Whenever we trade the VIX, we always stick with call/put options to avoid the operational problems and performance discrepancies associated with VIX ETPs. 

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CommentsAdd Comment

Gina said on September 30, 2013
  TFS,Thanks for stopping by. I will have to anyalze NGG. The only thing that worries me there is the fact that I could find only 5 years worth of data for this stock. I'll keep digging.Anonymous,If you follow the link above the table, you will find a google spreadsheet that has a bigger visibility than the embedded one on the site.I myself has set a rule to not pay more than 20 times earnings for a stock in order to avoid losing money by chasing "hot growth" stocks. I don't think that P/E ratios have to be equal to the growth rate of earnings.
DeflationIST said on July 06, 2013
  NUGT = money loser
The only person I know who is long gold mining stocks is Sir John Paulson and David Einhorn. Is Soros still long GDXJ? If he is, he's getting cremated.
JarodLin said on July 04, 2013
  Dennis the menace Gartman? Lol Ron.
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