Green Monday, page-20

Hi Fangk, the main entry requirement for the GDX is a market cap of 750M US. Up until last week it didn't look like SAR would make it but the strong share price movement and strong $A meant that it closed above 750M US on the cut off date last Friday.

A friend of mine has seen the rebalance names and confirmed that SAR will be added this Friday. I expect about 40M shares or more will be bought in the close.

The question is whether this will result in further share price appreciation. A lot of traders probably already predicted the adding to the GDX. However, in December 2015 RRL was added to GDX and the shares went up 10-15% in the week. That was a very similar circumstance because RRL only just snuck over the market cap threshold. SBM was added in the last two quarters and shares moved strongly too.

The game of rebalance trading is getting difficult because so many are aware of it. In March when NST and EVN were deleted from the GDXJ they were shorted heavily at the beginning of the week only to come back strongly.

I expect tomorrow morning to see SAR open strongly now that is certain to be added.

Note also that SBM was added to GDXJ.