Paying Your Dues, Like it or Not

For argument's sake, let us assume that the precious metals and mining complex are in the early phases as a sustained multi-year bull run which will not suffer any meaningful corrections (beyond 10-20%, which is fairly standard for commodities) for the foreseeable future. 

Assuming the above, it is still worth remembering that we are talking about an extremely volatile asset class, with mind-numbing gaps and moves which dissolve more quickly than the old commercial where an Alka-Seltzer tablet is dropped into water. 

At the moment, plenty of precious miners are wildly extended after tremendous multi-month rallies.  

CDE, for example, the Chicago-based hybrid miner with a focus on silver, is at a moment in time where the near-term risk/reward for fresh money longs is tilted towards the risk end of the equation, seen below on the daily chart. 

This is not a major problem however, as long as patience is shown in allowing some of these charts to now set back up into, say, August. 

But while the precious miners are stretched and pay their dues, like it or not, we have seen some nice rotations into steels and a motley crew of non-precious plays, to boot.