The young bull market that has helped deliver massive profits to us this year is finally seeing a real, meaningful correction. The truth is it was needed and overdue.
Here are some key points I want everyone to read so that we are all on the same page.
1. The sector really has gone straight up since last January, and for a bull market to be sustainable, it has to backfill support with corrections, so though this past week has been ugly, it’s exactly what is paving the way for the next big climb up.
3. Over 600 private placements took place in the 2nd quarter. This is a headwind that the market will also have to work through for the next 75 days.
No market goes straight up. During the last resource bull run, there were plenty of gut-wrenching moments. It’s also important to be disciplined stock pickers, because the best companies will always snap back quicker and resume their momentum once a correction has been exhausted.
As far as all of the B.S. coming from the mainstream media, the usual absurdity is being reported. Gold down on FED talk, happier times ahead, rate hikes, all the normal stuff. This is just noise… the fact is gold and gold shares are up an enormous amount this year.
The TSX Venture is the best-performing index of the year, and the gold junior index is up 202% since January 19th. In May, we saw a 15% correction in the shares, in July, we saw an 11% pullback, and in August, we are once again seeing a move down, which, in my opinion, will be followed up with new 52-week highs for the sector.
Be patient and prudent, and enjoy this pullback. The large institutions are using this as an entry point, many of whom missed out and are fairly upset about it. Anyone who looks a 1-, 2-, or 10-year chart will see that this confirmed bull market is just getting started!