Letitfly,

You asked "what will spark the juniors".

This isn't the first time we've seen such frustration in the junior resource market. However, it is the worst that I've seen. In any event, what I've observed previously is that you first see the producers and mid tier companies make significant gains before the juniors start spiking.

To really get the juniors going you need to have the larger funds jumping in. They get volumes going and that starts the flow into the sector.

The NY funds are just a bunch of sheep and will follow whatever market is hot at the moment. Right now theres no clear direction so they're just wandering around aimlessly looking for a place to run to. Let's face it, they're scared. Scared of the unknown. Fear is not a great incentive to jump into what is considered a high risk market like junior resources!

However, the juniors have been holding their own and may start to appear fairly safe to some of these funds. What's more, juniors tend to get their capital from equity financing rather than debt financing, which is increasingly tightening and more difficult to get, which should bode well for the industry. As inflation continues to send commodity prices higher, sending producers ever higher, the juniors start to become more and more valued.

Consider that the greatest factor in appreciation of these stocks is their potential as takeover targets... not potential as producing mines on their own. As such, what it will take to get the juniors to move is:

2. Commodity prices hold up and rise during continued market slide. Producers emerge as hedge against inflation and only viable sector to invest in.

3. A couple of undervalued juniors get taken out starting a cycle of aquisition. Producers should be flush in cash and will take advantage of market weakness to scoop up cheap small caps.

4. With producers and commodities expensive, Funds see opportunities in juniors and rush in.

5. Average investor, tired of losing money trying to pick bottoms in banks jump on the resource bandwagon.

6. Time to get out....

4. Funds

We've seen some strength in producers recently.