Friday, June 21, 2013

The Sky is Falling and the Sucker's Trade

The mining stocks have been beaten into oblivion and anyone who owns a miner should have a lick of common sense and realize the sky is falling. Heck, just look at any chart and that's easy to see. No wonder 'everyone' is selling.


Or, maybe ...... not.

This post will look at the miners and examine the sky that everyone is convinced is falling upon them. And after we put that in perspective I'd like to suggest to you the sucker's trade of the decade.

So the miners are hopeless. Worse than 2008 by a mile, obviously. OK, we know that is true because, well, that's what everyone thinks - so it MUST be true! 

Second duh.

Click on any chart to ENLARGE
OK - so the sky is still falling but the egg hasn't hit the cement yet and started to fry. But it will....cause this is the absolute worst decline in mining stock ever and that means the sky is falling. Everybody knows that.

OK - so now you are trying to tell me that the miners fell 71.12% in 31 weeks in 2008 and to date they have fallen just 57.58% in 39 weeks. 

Yeah, I get it. This is not the most extreme correction in miner's history. At least, not so far.

Well, don't tell anyone.... please

They are hopeless and you should just leave them to their misery. They know the sky is falling and, well, some of them have, you know, college degrees, fancy cars and big houses. Some will even talk behind your back on other blogs and, you know, resent you.

OK - you are probably right. And they are entitled to think and say as they wish. I understand. 

But what if they take the sucker's trade? Shouldn't I care? 

You mean the old triple top reversal pattern that is rare but eats suckers alive? Geez - you gotta tell them about that even if they are suckers ...don't you think?

I don't know. It's after midnight and I need my sleep. What do I owe these people anyway?

Well, it would just be nice of you to make the information known to them. Some will take it seriously and trade with a little more caution.

OK. Consider it done. I put the chart on the post and now I gotta get some sleep. They can do whatever they want but I'm not falling for the old triple top reversal pattern. 



  1. As a reader of some of the other blogs.....thanks for the input!

  2. that HUI trend line... always manages to get fix so that we have a trend line that is intact... when in fact it has broken down numerous times.. I wonder when we are all going to give it up john.. suckers trade is the miners as they have lost over 75% of their value...

  3. Anon - the HUI trend line is still intact. How do you explain that?
    And how do you explain that, 'in fact', it has broken down numerous times?

    And just for grins, how do you answer this question: why did the HUI not stop in 2008 at 210? That was the 'worst case' scenario trend line at the time. Instead of stopping at 210, price sliced that trend line and bounced off 150.

    The HUI was below 210, bobbing and weaving, for the next 26 trading sessions. No doubt it was an absolute eternity for those who could not take the pain.

    My point is intended to be two fold. First, trend lines are nice but they can be used very effectively against the little guy, like me (and maybe you).

    Second, the prices in the stock market are more a result of manipulating opinion and perception more than one would prefer to think.

    At present, nearly every person has puked up their mining shares. Someone else owns these shares now. Do you really think the entities that bought these puked up shares do not have a clue how this game is played? Did they buy to be 'charitable' to the little guy who could not take the heat?

    Of course not. These guys play to win, not be either charitable or nice.

    I have no idea when "we" are all going to give it up. But I would imagine that will be the bottom, don't you think?

    The sucker's trade in the past may have been the miners, but I don't think that is the sucker's trade of the future. Anyway, it is waaaaaay too early for me to throw in the towel with you - though I certainly do understand why you rightly feel the way you do.

    Right or wrong, I will continue to take the longer view. I held US Silver stock from 45 cents to 2.5 cents in 2008 and sold in the spring of 2009 at 22.5 cents - only to see the stock reach 85 cents in 2011.

    I'm not happy to go through this again, don't get me wrong. It's no fun, for sure. But nothing gets taken down forever and as long as the gold bull is alive there is no reason (in my mind) to throw in the towel.

    Good points/questions Anon. But that's my sincere response to the concerns you raised.

  4. Hi John - I remember your study, but cannot find it, where the B wave takes 3 shots at the 62% retracement (usually plus a little more) before rocketing into the C wave. We are almost at this level for rtn #1. This has been such a protracted retracement, I wonder if this will follow the standard pattern. Have I got the facts right, and what do you think? KJ

  5. As i said, the trendline wont hold.. not only did we blow through it at 227.. it appears that dust, and the "suckers trade" made a new high.