Tactical Update: Miner Tweaks (PREMIUM-UNLOCKED)

The following post was issued to TLS members on January 20, 2021.

Cross-asset volatility is creating opportunities — here’s what we are tweaking in our portfolios.

Today’s bout of volatility is creating an opportunity to make some tweaks to our portfolios, across several asset classes. Here are the specifics:

Selling/shorting miner exposure:

  • While we like the metals and miners in the longer-term, we sold our gold miner positions GDX and GDXJ last week into a key breakdown that has opened up further potential downside in the near-term — and, thus, a potentially better spot for re-entry. Today, the funds are bouncing back to test the breakdown level (GDX ~36.20 and GDXJ ~52.10). Thus, if you did not get a chance to trim last week, this is a good spot to sell them ahead of that further potential downside. We are actually shorting, i.e., buying an inverse gold miner fund (ticker, JDST) near the ~10.10 level as a hedge in case we do see that further downside before the ultimate low.
  • We are also trimming a small portion of our silver miners that we bought last week as they too are bouncing back to near breakdown resistance, e.g., SIL ~43.80 and SILJ ~15.20. We are happy to take a small gain on that lot ahead of potentially better re-entry levels.

Buying back crypto exposure:

  • Also, after selling some last Thursday over 44, we bought some more (small) of our bitcoin fund, GBTC, near ~36.00 (bitcoin ~35,000) as we feel bitcoin has another potential up-leg to near ~47,000 before this parabolic bubble pops. We will look to add one more lot, potentially, near the 32,700 level in bitcoin, which may correspond to 31.50-33.50 in GBTC.
  • Lastly, we bought a small position in the ethereum fund ETHE near the ~14.70 level (corresponds with ethereum near ~1250). Ethereum appears to be following the bitcoin script from December as it tested its prior highs yesterday near ~1425. If valid, it should consolidate here temporarily prior to a breakout and new up-leg. Again, these portfolio crypto positions are small given the volatility.

Trimming equity holdings into Fib Extension levels:

  • Additionally, we trimmed some profits in our SMH semiconductor fund as it tested a key Fib Extension ~245.00.

Other potential trims nearby include IYT ~235, XLK ~135, IGV ~365 and QQQ ~331.

As always, stay tuned to our DSS posts for further developments — they provide the most current updates to our investment portfolio and outlook.


Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.