Junior Gold Miners -- It's on Like Donkey Kong

On Thursday, I recommended that Gold & Resource Trader subscribers buy the Market Vectors Junior Gold Miners ETF (GDXJ).

My reasons were:

• The GDXJ has a track record over the past 5 years of doing well in July and very well in August.
• By entering on Thursday, subscribers were able to get in at or even below the price at which GDXJ began July.
• Tremendous negative sentiment on gold and miners, especially among the major banks.
• Good fundamentals for a bunch of stocks in the index.

(link to chart)

This entry was a bit tricky. I wanted to get this issue out after the morning rush, when I expected gold and miners would be sold.

Yet at the same time, we were grabbing gains on two other (non-gold) positions. And the market was weak. So I was praying to the market gods (and cruel fate) that those other two positions wouldn't tank while we pushed back the issue to get a (hopefully) better entry on GDXJ.

Those two other positions actually did well Thursday morning. So we were able to exit them at good prices, and enter GDXJ at a good price as well.

We track an entry of 40.88 on the GDXJ. Not the low of the day, but low enough to end the day positively. 

And GDXJ rallied even more on Friday, closing above the 20-day moving average.

Now, I can't predict what the market will do next week. Maybe gold and miners will tank. But I believe we're on the right side of the market here. 

And what do I think happens next? I already told you that.

Of course there is risk. If you're doing this on your own, I hope you do your due diligence before you buy anything.

And may Fortune smile on us. Often, the best thing is to be lucky.