We’ve just witnessed one of the greatest contrarian indicators in the history of this key market!
The following commentary is from Jason Goepfert at SentimenTrader: “Conditions are bad in the mining sector. So bad, that two of the leading players just resorted to the last-ditch effort of suspending their dividend payments. This is an extremely rare occurrence that typically happens after horrid declines and questions about their status as going concerns. By the time sentiment has gotten this ugly, it has marked the final exhaustion in the last two down cycles (see chart below).
By the time Freeport suspended its dividend in 1998, the S&P Metals & Mining Index was down 50% from its monthly closing high. In 2008, it was down 67%. Currently, it is down 69%…These dividend suspensions are exactly what potential shareholders should be looking for as a signal that sentiment is nearing a trough.”
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