Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16
Vauxhall Zafira Fires - Second Recall Issued - Inspection Before Bursting into Flames? - 21st Aug 16
Will the Stock Market Bubble Pop Regardless if the FED Never Raises Rates? - 21st Aug 16
US Government Spending - 3 Big Stories Not Being Covered – Part III - 21st Aug 16
Silver Analysis - 20th Aug 16
SPX New Highs, Correction Next? - 20th Aug 16
Housing Bubble - The Marginal Buyer Holds The Pin That Pops Every Asset Bubble - 20th Aug 16
Gold Miners Q2 2016 Fundamentals - 19th Aug 16
Which Price Ratio Matters Most in a Fiat Ponzi? - 19th Aug 16
Big Policies, Bigger Failures - 19th Aug 16
Higher Crude Oil’s Prices and USD/CAD - 19th Aug 16
Here’s Why You Should Look for Dividend Stocks and How - 19th Aug 16
Deglobalization Already Underway — 4 Technologies That Will Speed It Up - 19th Aug 16
These 6 Charts Show Why the Average American Is Fed Up - 18th Aug 16
SPX Easing Lower - 18th Aug 16
Low / Negative Interst Rate’s Legacy - 18th Aug 16
The 45th Anniversary of The Most Destructive Event In Modern Monetary History - 18th Aug 16
USDU - An Important Perspective on the US Dollar - 17th Aug 16
SPX Completes Wave 1 Decline - 17th Aug 16
How to Quickly Spot Common Fibonacci Ratios on a Chart - 17th Aug 16
When Does a Forecast Become a Trade? - 17th Aug 16
Kondratiev Wave - The Financial Winter Is Nearing! - 17th Aug 16
Learn "The 4 Best Elliott Waves to Trade -- and How to Trade Them" - 16th Aug 16
Stock Market Bears Turning Bullish At New All Time Highs - Time to Get Worried? - 15th Aug 16
Job Seekers Sacrificed to the Inflation Gods - 15th Aug 16
A Look At Commodities and Financial Markets Trading Week Ahead - 15th Aug 16
Stock Market New Top Forming? - 15th Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

How to Trade Elliott Waves

Gold and Silver Junior Miners Buying Opportunity Comes Once Every Six Years

Commodities / Gold and Silver Stocks 2014 Oct 29, 2014 - 06:36 PM GMT

By: Jeb_Handwerger

Commodities

Risk taking is a natural part of life, especially in the capitalist system where the greater the risk, the increased potential reward. The TSX Venture Index which is made of the Canadian start ups in junior mining and high tech is hitting lows not seen since 2002 and the 2008 Credit Crisis. Investors are now risk adverse, but as the charts shows below that could change.


The US economy has stabilized, however Japan and the Eurozone are struggling as well as many emerging economies. Despite the record amount of global QE, investors are sitting in US dollars, treasuries and large caps rather than investing in new ideas especially in the resource arena. Higher risk capital entering start ups especially in junior mining has reached a new low as investors have been seeking liquidity and dividends rather than capital gains.

Clearly, the strong global economy purported on CNBC has not yet been reflected on the TSX Venture Exchange yet. However, that may change over the next 3-5 years and now may be the time to buy up the best resource assets at historic lows when no one else is willing to buy them. Over the past decade, The TSX Venture has at least doubled or tripled from these historical low levels where it is currently trading.

$JX - TSX Venture Composite Index - Monthly OHLC Chart

Major rallies over the past decade began when the Venture was trading below $1000. The Venture is trading at $790 as this is written. I wouldn't be surprised to see a major bounce to the $2400 or $3400 level like it did back in 2009 and 2003.

GDXJ Market Vectors Juniro Gold Miners NYSE + BATS

The Junior Gold Miner (GDXJ) ETF appears like it could be approaching a major bottom in the $29 zone and could form a double bottom with the December Low over the next couple of weeks.

I just returned from the New Orleans Conference where I met with management of some exciting gold companies actively drilling and on the verge of major gains as they reach fundamental catalysts. I also met with strategic funds and investors who may be sensing a market bottom in the near term. Some of the smart money is looking for cash rich juniors with management that has been successful in previous bear markets. Strong shareholder support is crucial and they like to see insider buying from key shareholders and management. Major gold producers on the NYSE or top notch mining investors buying equity positions in some of these junior gold miners during these challenging times is an indicator of a potential winner. Seeing smart money make private placements during this selloff may indicate accumulation after capitulation. I am looking for companies fully permitted with high margin economics and a low capex in mining friendly jurisdictions. Stick to companies with either Preliminary Economic Assessments or Bankable Feasibility Studies demonstrating a reasonable capex, quick payback and low all in cash costs.

This is not a time to sell and get caught up with the margin calls. This tax loss selling season could bring us excellent buys. Be selective and stick to the best juniors who are active, liquid and experienced to build value during challenging environments.

Subscribe to my free newsletter to get up to the minute updates on rare earths, uranium, gold and silver.

By Jeb Handwerger

Disclosure: Author owns no stocks mentioned.

http://goldstocktrades.com

© 2014 Copyright Jeb Handwerger - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife