There’s no way around it at this time. Despite how much the mining stocks gave back since they peaked, they, in no way, were looking to go back into a bear market. They went bear back in the fall of ’11, but they turned up, and a new bull was born back in December/January. It’s still young. It’s been hardly recognized yet by the vast majority of traders and investors, and it’s likely to run for some more years yet; so it’s way too early to be getting rattled, and worried about it. Prices barely broke down through their 50-day moving averages, and almost none had even threatened to drop as far as their 200-day upwardly trending moving averages. It’s simple. This is a Bull Market in the metals and miners. You buy the dips, and you absolutely back up the truck during serious smashes… and we haven’t seen one of those yet.
I’ve been asked if it’s too late. No, it’s not too late. The bottom was made Thursday morning, and the news of this morning gave it all new impetus. Wall Street seriously gets back to work Tuesday, and you can bet things will start to heat up after everyone gets back to work. I expect volume to pick up, and it is far more likely to be volume to the upside, I would think.
If there’s any kind of counter-reaction to Thursday and Friday, then I’d definitely want to be a buyer, if prices fall back.
So, what did today look like. If Thursday was the turn, as I suggested it might have been yesterday… then, Friday would have been a follow-through day, and volume should have expanded and gotten even bigger. Well, did it? Let’s go to the charts and see…
Those that rose on only something like average volume were: CDE, SILJ, PAAS, SGDJ, SLV, GLD and SSRI.
Others that rose on larger volume were: SLW, FSM, HL, PVG, GDX and ABX.
Still others rose on light volume: RGLD and SGDM.
Alright, I’ll admit it… I’m disappointed in today’s volume. It wasn’t what it really needed to be to be convincing. The average volume increase for all of them was not quite 29%. Not bad… but, not good either. Things need to catch fire next week, to prove it’s for real, or it will be settling back some… and, we’ll have another opportunity to add more shares! Now, that would be a good thing… look for volume to pick up next week, and also look for ‘conviction’ to come to the market, meaning that the volume will largely be buying volume, and traders and investors coming back to work will be interested in gobbling up shares of our favorite miners. If they will, we’ll need to add more, too!
Here’s to your accumulation of real wealth!
Harold F Crowell