Interesting article on "When will Juniors start To Rally"

http://www.321gold.com/editorials/so...

Sobalov says "Investors continue to be wary of the volatility in the juniors after a bloody washout in August and another in December. Volume has fallen on many small caps and a number of trades per day can often be counted on one hand"

Turnaround on the Way

The factors enumerated above are preventing investors from jumping on the exploration and development value plays. But this will change:

• Both general investor sentiment and the sentiment of exploration and development stock investors is so low today that it not likely to get any worse. What this means is that another washout is unlikely.
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• Tax selling, a negative force in the latter part of 2007, is no longer a factor.
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• Crisis of credibility prompted by Novagold and Southwestern Resources disasters has almost run its course, and junior exploration companies are reacting with better reporting and disclosure.
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• The Securities and Exchange Commission (SEC) is relaxing its rules for investments in foreign stock markets by US investors. Under a proposal being prepared by the SEC, stock exchanges outside the US will be able to provide direct trading access to US investors through US-based brokers for the first time. This will greatly improve appeal, exposure and liquidity for many junior exploration and development companies traded on the Canadian stock exchanges.
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• In the past several months, valuation levels for large and mid-size producers have increased. On the contrary, junior exploration and development companies have actually gotten cheaper in this time period. The valuation gap between producers and junior exploration companies is the widest it has been in years. Capital-rich but resource-hungry producers will not miss this opportunity.

A takeover frenzy is coming and it will push exploration and development stocks much higher.