The day after the big washout selling event in mining stocks last week, high volumes and toxic-level dumping by big houses all around, I stuck this on Twitter:
So far it’s going as per the count. We had the knee-jerk late on Thursday and Friday (Number 2) we’ve had the ennui return this week (Number 3), we now have stocks re-tracing today on the back of the USD floating up and gold doing the opposite. In other words, we have so far faithfully followed three stages of a classic bottom in (precious metals) mining stocks and today looks like Number 4 in play. Therefore it’s time to make sure money is where mouth is because, assuming what we saw last week is indeed a classic capitulation bottom, the better rebound and real profits from bottom-feeding the move are up for grabs.
I may be wrong and last week wasn’t the final capitulation washout bottom for mining stocks (a lot will depend on what gold does of course, which also means “watch that dollar”). But it sure as hell looked like it to me and the playbook has ticked off the typical reaction stages as well. Either way, I’ve never had a problem about being accountable for my market calls, which is why this post exists. The game is afoot.