Gabo Mining Ltd (MLLOF)

[Will Munny]

http://nationaleconomist.blogspot.com/

Most companies in the Junior resource sector experience parabolic price movement in September and November and went on to exceed even the most optimistic analyst's short term projections. A sizable correction is a necessary, healthy and normal part of start of a re-emergent bull market. Though much of this correction is due to the overall correlation with the equity market (0.3 correlation to the NASDAQ with most major ree stocks) and commodity markets (0.4 correlation to commodity baskets).

Some insight into the fundamentals of the original jump. From 2007 some of rare earth oxides have risen by over 1000%, samarium oxide was $3.60/kg in 2007, $14.40/kg in the 2nd quarter of 2010 and $36.38/kg by Q4 of 2010...



Medallion Resources MDL.V (otc: MLLOF) is trading at par with the support level of the second wave up (most of the smaller cap ree companies experienced a traditional Elliott Wave, three up two down pattern) and is a great value at this price. Indicators also point to Medallion being oversold.

Most of the micro cap ree companies are not going to dip below their "2nd wave price per share" based on the fact that the underlying commodities they represent currently justify those levels. Let us not forget many of these Canadian and Scandinavian mining and exploration activities are less active in the colder months and hence produce less news to bolster the investors bullish outlook on individual stocks. Additionally we are headed into April, the strongest month for stocks since 1959, 40 months was April up, 20 months April was down (average gain 1.4% for the S&P and 2.0% for the Dow).

So when you are checking up on your portfolio and see the ree microcaps (and even the majors REE, MCP, TASXF) down again, don't panic, buy more.