A lot of explanations out there about the shitty performance of the mining stocks since the silver price explosion of last September (or even earlier). There's Dan Norcini's idea that hedge funds are going long metal and short stocks. Another idea is that ETF's (including leveraged ETFs) have siphoned away interest from mining stocks. Other reasons relate to the fundamentals of the companies and things like hedging and dilutions. And all those explanations were satisfying enough ... until Monday, April 11.
Let's go back to Friday, April 8. That day, many major mining stocks made all-time highs, and the sector looked to have finally recovered from its doldrums. Here come the momentum traders, right?
Wrong. The following Monday, the price of silver fell around $0.75, but quickly recovered, finishing the week $3 higher.
Since that Monday, however, mining stocks have disconnected from the price of silver. Looks to me like the prices of mining stocks were capped. Caveat emptor.