When considering which mining stocks one may wish to purchase, I went back and looked at their percentage performances during the first advance higher off their historical lows … for most, this would have been in the 2001 period in time.  I then looked at “how beat up” they were during the retracement … of course the junior mining stocks received the worst beating but that was to be expected because most of those outperformed the majors and mid cap during the initial advance.  Volatility is a major issue in the junior mining stocks but one must always remember that volatility works in both directions.

The next step obviously in to have done DD and determined which of the juniors had merit that justified the percentage gains in the initial advance as opposed to ones that were simply hyped on the various public forums.  Eliminating the ones that were clearly indentified as hyped, you are left with a basket of under-priced stocks to select from.

The next step is to evaluate each of them using technical analysis followed by ratio analysis.  Using this process of elimination one then increases their probability of being correct in the decision of which stocks to buy that will maximize the potential for percentage gains on this next impulse wave while simultaneously minimize the potential against losses.

Volatility can and should be used to your trading advantage whenever possible.  The key is to use the process steps identified above or by using a similar method of evaluation.

It is my opinion, based on analysis and historical evidence that once again the junior mining companies will outperform the other stocks in the mining sector just as they had done back during the 1970’s.

If one keeps it simple and looks at the big picture - long term price charts - they will, or should take note of the fact that junior mining stocks have an initial rally, then they get slapped down in a correction, and then on the second advance they break through the highs set during the first advance and do not look back until they have run extremely far and hard off the retracement lows.  If you study the charts you know this is true.

The most difficult decision that every investor is going to need to make in the months ahead is deciding when to jump off the bull.  Most will jump off way earlier than they should, and will as a result, miss out on substantial percentage gains.  The only way to insure yourself that you do not let your emotions impact upon your decision process will be if you take time to learn all you can about charting - TA and RA - and then apply what you know.  The charts are a valuable tool in an investors arsenal.

Prepare yourself to grab the horns of the bull because this next phase in this market is going to make the first phase seem like a stroll in the park.  You can actually beat this casino where the odds are set against the average investor - you just need to fully understand how the game in played.