There is a lot of noise in the sector today and I am seeing some stocks continuing to sell off, while others are moving sharply higher. The action in SLW tells me the worst is over. It is now outperforming the metals and the rest of the sector, and that is usually a good sign for the near term. The Cartel seems to have backed off, after one more nasty push lower to start the session it looks like the shorts are covering and the metals may enjoy a rebound for a couple of days.
Interventions notwithstanding, it will come down to the settlement of issues in Greece to sustain any stability in any of the market sectors this week. I think the situation is hopeless but I also think some temporary relief will be found as it appears the Greeks will approve the austerity and the world can pretend that things are on track for a little while longer. I think the US will also pretend to make nice about spending cuts and managing the debt but the next round of money printing is inevitable and that will be the confirmation for the next significant uptrend in the metals.
For now I think we have more sideways chop ahead but the lows are in. If silver and gold were rising and SLW was trading lower, I would not feel any confidence at all. As of this morning I think we can do some bargain hunting.
cheers!
mike
