Jordan Roy-Byme is presenting his call on the turn around in junior mining stocks.Sentiment in this sector is very low now: everybody hates Gold, Silver and mining shares, but below the radar screens the best stories are getting bids again. Goldcorp bid for Osisko can be that turning point everybody is waiting for. We need further follow through with Gold crossing $1270 and Silver above $21. Then we will have the time when juniors will be jumping 10% -15% a day and people will start to be afraid to miss out the rally. Stocks like McEwen Mining are trading now with 31 million shares being sold short and it will be the fuel for the breaking to the upside.
McEwen Mining And TNR Gold: Report - Argentina Is In The Mood For Change On Investment Policy TNR.v, MUX, LCC.v, SSRI, PAA
"Argentina mining landscape is changing for the better according to the report by BN Americas. Lumina Copper is trading above CAD 6.00, McEwen Mining is breaking out to the upside and TNR Gold has found some bids as well recently."Gold M&A Is Back: Goldcorp launches $2.6-billion hostile bid for Osisko Mining GLD, TNR.v, MUX, GDX
"We were missing the very important sign of the bottom in Gold and Silver markets - M&A activity with industry insiders bottom fishing for the distressed assets. Today we have an important development confirming observations of Rick Rule in the market place. Big money are looking for deals now. Rob McEwen's new play McEwen Mining is breaking out to the upside today on some volume with Gold crossing $1250 level."
Rick Rule: Money Are coming Into Gold And Silver Now
"Rick Rules discusses the recent bear market in Gold and what is going to happen in the beginning of the new bull phase. Money are coming into the resource sector again. It is the very big money, which are circling this sector now. Who are the investors? You can guess - they are mostly from Asia - China and Korea, new type of long term investors. There are a lot of opportunities in the market now - we have learned from our previous experience and the valuations are very appealing now for the right plays."
Junior Mining Stocks Have Bottomed
Thursday January 16, 2014 14:13
There is no need to beat around the bush. Junior mining stocks have bottomed. The bear market is over. Sure we could be wrong. We've been wrong before and will be again. However, the evidence is too compelling and is growing by the day.
The TSX Venture (CDNX) is the market for juniors in Canada. The market consists of exploration companies focused on precious metals and other minerals, energy companies and some technology companies. It's not a perfect indicator for the junior mining industry but it's good enough for the experts. On Thursday the CDNX closed at a nine month high. No, that is not a misprint. The junior market reached a nine month high. It bottomed in late June, made a higher low in December and has surged 10% since.
For an American, GDXJ is the proxy for junior gold stocks or junior miners. I like to think of GDXJ as the "senior" or established juniors. The CDNX consists of many stocks trading under $1 and a $100M market cap while GDXJ is mostly comprised of companies in the $100M to $500M market cap range.
GDXJ declined 81% from its April 2011 peak to its December 2013 bottom. As we noted several weeks ago, GDXJ tried to penetrate its December low three times and failed. The market has since rallied back above the previous (June) low. Given the severity of the bear in terms of price and time, extreme negative sentiment and recent bullish price action I believe it is highly likely that the bottom is in.
Our frame of reference for the bear, the gold stock bear analogs chart continues to suggest that the bear market in senior gold stocks is all but over.
The juniors (both CDNX and GDXJ) peaked in April or five months before the senior gold producers. Hence, it makes sense that the juniors would bottom first. The assertion from the analogs chart (that the seniors may have bottomed or are very close) gives us further confidence that the juniors have bottomed.
Most of the stocks that we follow bottomed in June. The following chart, which was sent to premium subscribers is an equal weighted index of 15 of our favorite gold and silver stocks. The index bottomed in late June 2013 and made a strong higher low in December. It would have to decline 26% to test the June low.
Extreme bearish sentiment, compelling valuations and an extreme oversold condition can create a compelling contrarian opportunity. However, that opportunity can remain far fetched without some positive price action. We now have the positive price action that allows us to call a bottom in the mining stocks and strongly so in the junior gold stocks. The CDNX looks to have made a real double bottom and closed at a nine month high. GDXJ reversed course after failing to continue a breakdown when the time was ripe. Moreover, as evidenced by our top 15 index, the stronger and higher quality companies are showing leadership. The risk has shifted from getting caught in a final plunge to missing out on the rebound. If you'd be interested in learning about the companies poised to rocket out of this bottom then we invite you to learn more about our service.
Jordan Roy-Byrne, CMT