Credit David Brown & Bob Hoye
Have we just experienced ‘capitulation’ in gold stocks, or just a particularly nasty sell-off?
Rick often mentions that ‘capitulation’ is a looming threat in a bear market. When it looks like stocks are already ‘down and out’, investors get driven over the edge and decide to sell at any price they can get. Investors want out. People who work in mineral exploration and development also give up and look at other career options.
Back in March, Rick said gold could fall back to around $1,150 this year. In mid-October, Rickmade a stronger prediction – October could be the month that we see capitulation in the junior market. “October is a month full of emotion” he said, and it’s easy for a weak emotional market to be driven over the edge by short-term volatility and a natural decline in prices due to tax-loss selling. “The market is cheap but it will get dirt cheap in a capitulation. I think there is a 50 percent chance for a terrifying capitulation sell-off within the next two weeks.”
In a complete capitulation, stocks melt down dramatically and some stocks just go ‘no bid.’ That hasn’t happened yet, which means that we may be witnessing a very nasty sell-off, but not complete capitulation.
Is the bottom really in? Could there be a final capitulation just ahead of us?
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