I’ve received a few inquires as to my thoughts on the mining stocks recently and although I posted my thoughts on the sector in this post just yesterday, things move fast in the market & that holds especially true for the mining stocks when the sector is hot as it has been lately.  First off, I want to clarify or expand on yesterday’s statement that I my plan was to wait until either my pullback targets were hit OR both the metals & the miners clearly broke out of their recent trading ranges. The key word in that statement, which may be subject to various interpretations, is clearly. 

Today we saw GLD, SLV, GDX, & SIL all gap over & remain above (so far) their recent trading ranges. However, based on the fact that the aforementioned bearish divergences on the 60 minute charts as well as the overbought readings (60 minute thru daily time frames) are still in place (and even more pronounced now), my preference is to wait to see if today’s move sticks for at least one trading session, if not more or it the breakout fails soon. Most importantly, that is my plan as an active swing trader as far as my trading account goes. As both an active trader & a longer-term investor, I wear two hats. In my longer-term accounts (IRAs, kids’ college savings, etc..) I take a longer-term swing/trend trading or investing approach and as such, plan to ride out any counter-trend pullbacks in the mining sector as long as the intermediate & longer-term technical picture remains constructive. That pretty much sums up my thinking at this point and as there is apparently a lot of interest in the mining stocks now (which is another reason that I’m not as eager to be buying now as I was in early June, late December/early Jan and late June of 2013 just before miners exploded… translation: I like to buy the miners when everyone hates them & sell when they start to become over-loved), I will continue to provide updates as I notice any significant developments in the sector.

Finally, this is completely a “gut” feeling but something that I’ve noticed over the years trading the miners is at times, gold stocks love to burn traders at certain technical junctures. Just when a move looks to have some solid traction and a well-watched pattern, such as the recent consolidation range that I’ve been referring to in the metals & miners, which is most certainly being viewed and discussed by many as a bull flag on the daily time frame or some other variant of a continuation pattern (which of course, just broke out), that’s when the miners have been known to pull a sudden 180 out of nowhere, reversing sharply and beyond the scope of a typical pullback, i.e- a bull-trap. This isn’t anything that I’m betting (i.e.-trading short) on, but I would just prefer to see how prices follow thru following this breakout above the recent trading range/flagging-action, even if that results in buying back into the miners at higher prices at some point in the near-future.