Jim Cramer Pounds On Investors To Buy The New Junior Gold Miners ETF (Video Included)
“Finally and on other potentially “mad money” fronts, CNBC’s Cramer last night pounded the table for owning the newly-minted MV Junior Gold Miners ETF (GDXJ). For a guy that sometimes conveniently uses the charts to his benefit, this strategist points to the confirmed reverse and bearish symmetrical triangle that’s setting up in its old school Gold Miners (GDX) peer. That’s a stark contrast to Cramer’s optimistic “relative strength” case versus Comex Gold (GLD) made on the air last night,” Chris Tyler Reports From Inside Futures.
“As much, my best technical guesstimate for both mining plays is there are at least two “Monbacky!” situations underway. For option traders, (GDXJ) doesn’t sport options. However, the (GDX) does enjoy solid option liquidity and one point wide strike prices. Translated into language other than “Buy, Buy, Buy!”, a variety of outright and spread plays to manage risk does look like a much more compelling way to play the game. Intraday, GDX is off about 1.50% near 49 and GDXJ is off by a similar amount at 25.10.,” Tyler Reports.
Here is a script of what Jim Cramer talked about on the Mad Money Show below: (We have also included a 10 minute video on the segment below as well)
“This is a gold ETF that just launched… the Market Vectors Junior Gold Miners (GDXJ)…”
“They all have these horrible names, what can I do?… this ones symbol is GDXJ… I got this one via ETF expert Don Diom, my colleague at RealMoney.com, the paid site of TheStreet.com where I am Chairman… he wrote a great story today and if you want to understand this you can go to the free site TheStreet.com about the GDXJ… and I, like him, think that GDXJ will be a winner… why? … GDXJ lets you own 38 medium and small gold and silver miners… and it should have even more exposure to higher gold prices than the GLD which owns gold directly.”
“Why is that?… so far the GLD is up 27% but the GDX which is the ETF for the larger gold miners is up 47%… that is a keeper… I like the GDXJ more now because the younger gold miners in it have a lot more room for growth than the mature miners in the GDX… we would not want to own the stocks of the gold miners individually given their track record of inconsistency… just think about the latest disappointing quarter from Agnico-Eagle… where it got hit with every problem that any gold miner could face in one 3 month period… production short falls, higher cash costs caused by mining lower grade rock, and production shut downs in tow of its mines… the late start up at one of its new mines… boy, owning an individual gold stock is darn hard.”
“We may not like the gold miners individually… but collectively the way that you could own them is the GDXJ.. you are talking about producers that might be able to turn out excellent earnings because they are making so much money… so much more than they though they could make… they cannot even help themselves.”
Here is the bottom line…
“The Bottom Line!: To paraphrase Gordon Gecko, gold is good… especially when it goes higher… do not fear higher gold prices… they no longer signal economic turbulence and negativity… instead they are telling us lots of big positives… and if you want to play higher gold prices directly? go with the Market Vectors Junior Gold Miners … otherwise known as the GDXJ.”
Here is the video below:
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