Otto Does Brent Cook…

Otto Rock does Brent Cook doing BNN

I have the advantage of being a round the world, macro market manager with the ability to avoid terribly bearish sectors until the time is right. Two of the best people in the sector (IMO) are Otto and Brent (with a side Mickey Fulp and Eric Coffin).

Otto’s post caught my eye because of its list of ‘bear market low’-ish sounding things…

“I’ve never seen it this bad”
“Majors have really cut back”
“…only ten percent (of juniors) have the cash to do something”
“…geologists saying there’s no point in exploring any longer”
“…I think it’s gotten so bad…that we’ve seen the worst”

You can get the Brent Cook interview linked at Otto’s post. I always find him to be a good listen: Brent Cook Does BNN

NFTRH 376 added a gold mining specific chart list, which is comprised of many of the smaller miners, developers and explorers (including LSG as discussed by Brent and Otto) that I think will out perform in the early stages of a bull market. Indeed, several of them bottomed in 2013 even as HUI has descended to new ignominy (and its long-term H&S target of 100 I might add).

I think there is good bounce potential for the sector but it as a whole is in a technical bear market. Period. Yet there are certain indicators popping up (hello gold-oil and gold-commodities ratios) and bleak sentiment stuff like the above quotes that argue for a greatly improved risk vs. reward proposition for patient investors.

One thing I can tell you is to watch the 100 level on HUI. That is a technical ‘stop loss’ to a bounce scenario and a doorway to an express elevator to the 70’s if it is lost. There is no support from 100 to 75 or so.