$Copper

One very good indication of how mining shares are under performing the underlying commodity is the copper chart vs. the CDNX.

I would say that the copper chart has a very bearish outlook for certain, and that the CDNX will be taken down along with it.

Now THIS is what you call a 'Death Cross.'

FT Alphaville

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GBN.V Weekly

I don't know how many times I've changed my outlook for the GBN.V share price on the way down to 18¢. The weekly P&F chart is still showing 18¢ as the bearish price objective prior to a reversal. Gold prices can change drastically within a month, so the monthly chart is just too long an interval to be contemplating.

You can't really rule out further equity declines if the mining shares collapse, though if the gold price remains robust, even climbs, then gold producers might have an edge.

GBN.V Weekly P&F

Its as if fundamentals and company developments just don't matter. A rise in the gold price above ~$1800/oz. will settle this company's fortunes, even if grade controls are totally abandoned and returns collapse.

Either share prices will be dragged down by the impending collapse in the CDNX, or that the fundamentals will exert themselves finally. The share price is clearly irrational, since the stock is trading below book value and a P/E of 11.

If you look at the wave count this way, then the company was basically at the beginning of its life in 2009 when the PEAs were completed.

We are in a growth stage presently, with one year of commercial production and in the same position as last year, when gold prices spiked.

supersize: http://www.flickr.com/photos/11747277@N07/7273191812/sizes/l/in/photostream/

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-F6