The Dow Jones has been falling all week and continues lower today on this Friday the 13th.
When looked at from a longer term chart, through the lens of the 7 year cycle, it looks very toppy.
As you can see there were major pullbacks in 2001 and 2008… and so far in 2015 there was the beginning of a major pullback in August followed by a weak rebound in October that now seems to be turning over.
We are still expecting major events to occur this fall and for 2016 to shock the world.
Aside from shorting the market (which we did in August to the tune of a 4,500% gain and will be re-iterating our put option trade to subscribers this weekend) one sector that stands to gain tremendously once the collapse continues is the sector hardly anyone talks about: the mining sector… and in particular the precious metals mining sector.
The reason hardly anyone talks about it is because the gold mining sector has now reached the longest lasting AND worst market in history.
The bear market has now lasted nearly five years and gone down nearly 80% in value in that time frame!
In fact, in comparison to the price of gold, the gold stocks are now at their lowest level in modern history.
If we are correct in our call that a major turning point occurred this fall then we will see a rebound in the gold mining stocks that will be epic.
I had the opportunity to speak with Collin Kettel of Palisade Capital, in Acapulco, who provided us the above charts (and more are included in the video) to discuss the opportunity in this sector here:
Even a small switch in your portfolio from traditional stocks to gold mining stocks could, and should, provide out-sized gains in the coming few years.
Remember, the gold market was obviously interfered with when it reached a high of nearly US$2000 in September 2011. Suddenly for no real reason, the market turned. At the same time, the Federal Reserve embarked on a series of money printing programs that further debased the dollar. This should have sent gold higher. It didn't, no doubt because of massive manipulation.
But manipulations cannot take place forever. And nothing has really changed. From a technical standpoint we're in a bear market for gold stocks. But take a step back to survey the larger business cycle and the basic “golden bull” is still operational and began around 2002.
The end of bull markets involve blow-offs. Sooner or later this false paper bull market will recede and the golden bull will reassert itself as the business cycle begins to turn once more.
Central bankers cannot stave off reality forever. During this next “turning” whenever it occurs, junior miners will explode.
And it could happen very soon.
[Editor's Note: TDV's Senior Analyst, Ed Bugos, is one of the most respected gold mining stock analysts on the planet and you can receive his recommendations on what to buy in the sector by subscribing to TDV Premium here]