• 262 days Will The ECB Continue To Hike Rates?
  • 262 days Forbes: Aramco Remains Largest Company In The Middle East
  • 264 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 664 days Could Crypto Overtake Traditional Investment?
  • 669 days Americans Still Quitting Jobs At Record Pace
  • 671 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 674 days Is The Dollar Too Strong?
  • 674 days Big Tech Disappoints Investors on Earnings Calls
  • 675 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 677 days China Is Quietly Trying To Distance Itself From Russia
  • 677 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 681 days Crypto Investors Won Big In 2021
  • 681 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 682 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 684 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 685 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 688 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 689 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 689 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 691 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Precious Metals Mining Stocks: Long- and Short-Term Outlook

Based on the June 29th, 2012 Premium Update. Visit our archives for more gold & silver analysis.


 

Today's market session is very volatile, not only in case of euro, dollar and stock indices, but also in case of precious metals. The rally in the mining stocks is much less significant than one might expect based on gold's and stocks' rally. Should this be of concern to precious metals investors?

In today's essay, we will provide you with two mining-stock-related charts: one focusing on the long term and one that provides a short-term signal.

Let's begin with the former (chart courtesy by http://stockcharts.com.)

$CDNX (S&P/TSX Venture (CDNX) Composite Index) TSXV

In the Toronto Stock Exchange Venture Index (which is a proxy for the junior miners as so many of them are included in it), we have a significant bearish signal. Prices have moved below the neck level of the bearish head-and-shoulders pattern. The pattern is: huge, clear, and completed and the implications are very bearish for those holding juniors and for other precious metals investors as well.

We created a downside target level based on the size of the head in this formation and it is close to the 2008 low. It's also much lower (40% or so) than current price levels. There is clearly much room for further declines.

However, not everything is bearish about the mining stock sector. For instance, we have just seen a bullish signal from one of our in-house developed indicators that.

SP Gold Stock Extreme Indicator

The indicator moved above the upper dashed line and this signal has bullish implications. Please note that in April it marked the beginning of a consolidation and in other cases (and in previous cases since the 2008 bottom) it signaled local bottoms.

Consequently, based on the above chart, a rally seems likely. Then again, metals and mining stocks have already moved higher today based on euro's rally. Consequently, the rally - or at least most of it - that the indicator suggested may already be behind us. Another small move up will not surprise us either.

Summing up, the outlook for miners remains bearish for the medium term (bullish for the long term) but, a temporary move up is quite likely. At this time, however, this move up, is not something that is signaling a change in the trend - based i.a. on the negative situation in the TSX Venture index, it's rather a pullback within the decline.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It's free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!

 

Back to homepage

Leave a comment

Leave a comment