The markets have been dominated by extreme swings in sentiment over the last couple of weeks without taking much time to think things through. It started with a surge of enthusiasm on the news that Trump was going to lose the presidential election and a surge in the gold price which did wonders for gold stocks, causing breaches in downtrends of the producers’ share prices.

Then came the news that there was a 90% effective vaccine for the virus, causing the biggest daily fall in the gold price for seven years. Stock markets in Europe in particular surged higher as speculators piled into companies that were likely to benefit, while tech stock prices came off. The oil price surged on the prospects of higher demand that comes with increased consumption from transport activities. There was a naive assumption that everything was going back to normal, in a hurry, but it neverworks out quite like that. Yes, we can see light at the end of the tunnel, but the tunnel is still long.

It may be that the movements in the gold producers was a bull trap. Those who bought on the breakout are probably regretting it, even though the odds are that the gold price will move higher in the fullness of time. Oil stocks have had an immediate response to oil price movements, but maybe we are seeing the same bull trap movement that we saw with gold stocks.

Interestingly, market reactions to positive exploration results is becoming more muted. Maybe that is because previously preferred explorers with good projects are just reporting more of the same. Maybe they are just fully priced at this juncture. Maybe the punters are just wanting new stories to play. So, positive updates just provide opportunities for the spectators to cash out and look for higher risk or new plays.