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The Bear Market In Precious Metals Mining Shares Ended Yesterday

By Tommy HumphreysStock MarketsMay 21, 2013 03:41AM ET
www.investing.com/analysis/the-bear-market-in-precious-metals-mining-shares-ended-yesterday-167784
The Bear Market In Precious Metals Mining Shares Ended Yesterday
By Tommy Humphreys   |  May 21, 2013 03:41AM ET
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There have been more false bottoms in precious metals and mining shares than a 1920s gangster’s briefcase. However, yesterday’s massive bullish reversal has all the ingredients of a major market low – this one looks like the real McCoy. Due to the confluence of the following factors, May 20th, 2013 has a very good chance of going down in the history books as a major inflection point at the end of one of the most grueling bear markets in the history of the metals and resource space:

  • Gold & silver put/call ratios at record highs
  • Gross gold short positions have reached a new record high of 14.3 million ounces (~$19.7 billion)
  • Former gold bulls (large institutions and fund managers such as Soros) have turned bearish
  • Die-hard bulls are despondent
  • Bullish momentum & volume divergences
Gold Miner’s ETF (GDX)
GDX_Daily
GDX_Daily

Silver Wheaton (SLW)
SLW_Daily
SLW_Daily

Gold Daily
GOLD
GOLD

Gold Monthly
Gold_Monthly
Gold_Monthly

Adding weight to the bullish case is the bizarre action in silver during the last 24 hours, which has all the makings of a final capitulative flush at the end of a brutal 24-month bear market:

Silver
Silver


And the icing on the cake comes in the form of the “explanation” for yesterday’s metals rally: “short covering and bargain hunting”

This is all very reminiscent of the October 4th, 2011 equity market bottom:
SPX_Daily
SPX_Daily

What was the financial media saying when equities reversed higher during the final hour of October 4th, 2011 you ask?
The Bear Market In Precious Metals Mining Shares Ended Yesterday
 

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The Bear Market In Precious Metals Mining Shares Ended Yesterday

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