I know a lot are very discouraged out there. I can feel it in the posts, both tone and lack of activity. Here is a positive word. The end is nigh. What I mean by that is we are in the final game…phase III. If you have survived this far you can make it to the promised land where you can lay out your line and strap yourself on to the next bull. It may still take the rest of 2015, but we can now see the end from here. This chart is another significant milestone in this bear market. As I said we still could have another year to go, but don’t take your eye off the prize and that is to be in place for the next bull market.
Take some time to step back and ponder this chart. Its a ratio chart of GDXJ vs. GDX. Juniors vs Majors. We all know the juniors get slaughtered in bear markets and all but the real ones just go away. We always like to throw around the word Capitulation. Well knights that’s what we see in this chart. Note how the bear followed all the rules and the phases can be well defined, clear and crisp. Also note how the capitulation is evident in phase III. Just like it is supposed to happen. The juniors have capitulated relative to the majors. You knew they had to be the first to go. So one would expect the majors to go through the same process after the juniors are done. So this chart serves to show that we are on course to a low here sometime in the future.
The biggest problem is the vehicles we have chosen. The levered ETFs have chewed guys up. Keep that powder dry