GDXJ looking more vulnerable than GDX, which is saying something because if GDX cannot hold support at $25, declines from there could be nasty. Adding to GDXJ’s vulnerability is seasonality. With this being the last full trading week of September, it is worth noting October is usually the worst month in which to be long gold. [Fed-Fueled Gains May be Short-Lived for Gold ETFs]
Compounding GDXJ’s potential October woes is the fact October is historically the worst month of the year for small-cap Russell 2000 Index, which usually loses an average of 1% in the tenth month of the year. After its 9.1% loss on Friday, GDXJ risks returning to its July lows if it cannot stay above $40.
Market Vectors Junior Gold Miners ETF
ETF Trends editorial team contributed to this post.