Monday, December 27, 2010

The Next Move for Miners

I think precious metal stocks have consolidated nicely and I think there is a lot of upside here.  ABX, the world's largest mining corporation was flat today even though other miners were down.  I think that shows the strength of spot, because ABX also has the world's largest inventory and reserve (per miners).  Once the price of spot goes up, and I think it is on the doorstep, one move away from $1440, then the producers should reap huge rewards.  Mining stocks should benefit nicely from this next move up which is setting up because of the inability of all governments to solve their credit/debt problems.

As far as middle players like SLW I think they will benefit the most.  The middleman is usually the most profitable position to be in for business and with the huge upside to silver and all precious metals, there will be money made on this play.

For example I think SLW is priced well here, at $37, and I think it will only take two or three days to get the price to $46.  The move may have started already.  Today's price action saw SLW move bottom to top with high velocity.  If Tomorrow and Wednesday can play out, we could be at $46 soon.


  1. What a day! SLW up 4%+, same for SIL & GDXJ. The junior miners on fire. Hope we hold 1400/30 Au/Ag today.

    I like reading your stuff, LH. Keep it up.

  2. Thanks JP. Yeah, today was the day. The consolidation of the last few weeks make a move to $1440 possible by the end of the week. We could consolidate tomorrow, but there will be more days like today coming up.