Breakdown! Time To Start Buying Miners and Metals Again

I started buying miners again today. I might be early, since everything was crashing today, but the areas I have been focusing on came into important support zones after a substantial 4-5 month correction in the roaring bull market. Seasonally, we could still have a few more weeks of weakness in the miners, but today it became time to start buying again. I added almost across the board to my mid-cap producers and a few juniors, as well as the SILJ and SLVR etfs.

I will let the charts do the talking. Remember that lines, whether a moving average, trend line, or support/resistance, are only areas to consider. A true break does not happen in the instant something crosses the line, it can only be known some time after if the break was true or not. The point is that far more often than not, resistance and support hold up, rather than continuing into a new trading zone. Let’s take a look at the SILJ daily chart first.

Now we step back and take a peek at the weekly $HUI chart of the gold miners.

Pretty clear to see this is the time to take positions, and add to our winners. Whether today was THE bottom or not remains to be seen, as we have some conflicting signals, which means we should be prepared with nerves for further downside in case it occurs. However, one can never be 100% sure, we can only play the probabilities. I am comfortable starting to buy in size here, after selling roughly 60% a day or two before the highs in late January. I expect we will have to wait awhile for momentum to return to the upside, and I even hope for lower prices to keep buying, but I was busy today acquiring my favorite positions to hold for the remainder of the bull market.