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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (36807)7/24/2005 12:47:08 PM
From: ild  Read Replies (2) of 110194
 
From Saville

One of the strangest and most frustrating aspects of the recent stock market environment has been that very few exploration-stage resource companies or junior producers have participated in the rally. In fact, speculation has been concentrated in a small number of large-cap resource stocks.

This is strange because the focus of speculation generally shifts from the major stocks to the smaller stocks as a rally progresses, but even though we are probably at or past the peak of the current commodity cycle there has been very little speculation amongst the market minnows since the second quarter of last year.

A possible explanation is that hedge funds have dominated both the trading in commodities and the trading in commodity-related equities over the past year or so. It could be that because these funds are often playing with relatively large sums of money and want to be able to get in/out of stocks in quick time based on technical indicators, they are only interested in the largest and most liquid stocks.
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