This analyst argues the HUI is going to drop down tor the 100 level at which point the opportunity in mining stocks willl be one in a lifetime. As he says "this may sound ridiculous, but the HUI at 200 sounded just as ridiculous when it was trading above 500 in late 2012. Yet, a year later, that’s exactly the value that we saw". All 10 charts will enlarge with a click. - Robert Zurrer for Money Talks
The price of no asset can move up or down in a straight line, so why should mining stocks be any different? They have been declining relentlessly for almost 2 weeks, erasing more than 10% of their value. Sharp? Definitely. Unsustainable? Perhaps. When will the turnaround take place? It depends.
It depends on the bullish signs and confirmations that we get. The correct question to be asking now is: “Why do we need any confirmations at all?” The reply is that because the situation is tense as there are good reasons for both a turnaround in a day or two and a continuation of the decline without a meaningful correction.
Before moving to the above details, we would like to give you an update on the gold-stock link. Let’s start with gold’s price compared to the S&P 500 Index (charts courtesy of http://stockcharts.com).