Loading ...Miners – Big Picture
I’m starting to think the bottom may essentially be in (even if not to the penny) for the miners and gold still can move lower but wont substantially drag the miners any lower (note divergences showing and the shape of the turn. The best charts are those you can read from across the room and this one, which tends to lead the miners, is telling me we’re hitting the inflection point. It’s also suggesting that we shouldn’t anticipate a sharp liftoff but more basing in 2016. I think the real gains may not begin until 2017. I’m seriously thinking about holding the miner positions I have right now and not even touching them for years. Why waste my time with something during a basing year when there are better fish to fry and trades to make in other sectors like energy whose charts look more like V bottoms?
Mark, I looked at 13 gold and silver miners that are included in the GDX etf that were in business in 2000 and 2001 and of the 13 I looked at about 9 of them had a pretty distinct V bottom in Nov 2000 and a few of those retested that bottom but the other 6 just headed up….the V bottoms were in ABX,AEM,AU,BVN,GFI,GG,HL, NEM, KGC…SEMAFO didn’t bottom until a year after the others (Nov 2001), RGLD had the most rounded bottom going from DEC 2000 to April 2001 at the same price before lifting off, PAAS had a lower low in April 2001 after the Nov 2000 low but then a V bottom occurred
Interesting observation! It got me pulling up some longer term charts to see if I could make some sense of it. I’m about to add a chart to the top that shows I believe the difference now is “the swifter the drop, the harder the bounce”. You will see in 2000 that the drop in miners was steep and the bounce was strong….initially until the pace came back to the curve. Today we have what looks like a corrective move, and while I expect the multi-year uptrend to be as strong this time I don’t think the bounce will be as hard. If it is so be it…I will be thrilled but I wont be looking for it.