UEX Corp T.UEX

RE: someone want to explain the fisting going on?

[b00gn1sh]

Here's my interpretation of events.  May be 100% wrong, as I am drawing a lot of conclusions with minimum evidence.

Rumors are that a hedge fund in Asia got into trouble overnight with a silver position, and was forced to liquidate silver in a margin call.  That would explain an 11% (or even greater at one point) drop in silver overnight.  So what does this have to do with a junior uranium miner you ask?  The relation is indirect.  I will avoid the issue of why gold and silver have been in a downtrend since mid-July, but it clearly has to do with the strengthening dollar & weakening Euro, and likely has to do with the US elections coming up.

I've never been able to figure out the correlation between gold and silver miners and the uranium miners, especially on the junior scale.The best I can figure is that the same entities (funds, hedge funds, investors) who are likely to own or buy UEX shares are also likely to own or be interested in buying junior gold and silver miners.  By junior I also mean near-term producer or developing producer in addition to exploration outfits.  Just look at the likes of publicly traded Pinetree Capital (T.PNP) for an example of this class of fund.  Having followed the uranium miners for 3-4 years, I know that they do trend with gold and silver, for whatever reason.

So, you have funds who are being forced into disgorging their shareholdings across the board in mining.  You have individuals likely facing the same thing.  Where is the buying coming from?  It's just not there, so these miners like UEX, URE, and across the precious metals sector have been dropping for weeks on abnormally low volume.  Distressed sellers are being forced into selling into the weakness, and buyers are either on vacation or protecting their capital.  That's my feeling on why shares in something like UEX are pushing down to 104 week lows.

Keep in mind that August is seasonally the low point for precious metals and miners.  We're nearing some sort of capitulation point across the board in these stocks.  If I had more capital at my disposal, I would be deploying it in the sector.  As it is I am scrambling to avoid forced liquidation myself.