Bounce underway

The bounce has arrived, and so far, so good. It has been a sharp one, taking the strongest miners of the last 9 months back up to their recent highs, some making new post-2016 highs in just a few trading days. So, is this something that will fizzle out in a week or two, or a resumption in trend to the upside that started last October? It’s too soon to know for sure, but to me the force with which this bounce took place is telling us a lot. The miners want to go higher, but might still be held back by the typically weak summer when few people get involved. I will stay invested because a month or two wait, if that is what it takes, is the price to be paid for making the big gains that this group can serve up, for those that can stay invested. There are also precedents, like 2016, where the miners went up all year long straight into August, I’m not betting on this, but the point is that it can happen, and that was the best year for miners since 2011.

I also note that the general stock market, like the QQQ etf, bounced with equal force in these last several days. However, I’ve been looking for their upside to peter out, and a day like today where they opened strong (up 1% or so), but closed negative on the day. If the stock market can weaken again in the near term, that should support the precious metals and their miners. In any case, I am heavily long, and also added another stock today by the symbol MUX at $1.40 per share. See the chart above.