Gold miners, as represented by the HUI (NYSE Arca Gold Bugs Index), gapped below their 2008 lows on the open this morning:

Click to enlarge

HUI_Monthly_11.5.2014

This chart is remarkable considering the magnitude and severity of the Global Financial Crisis (GFC) of 2008 and speaks to the depth of the bear market in gold shares we're seeing today. However, despite these tempting low levels, the technical breakdown which began in September is of such ferocity that it is unlikely that the lows are in.

HUI_Symm_Triangle

A quote from legendary hedge fund manager Barton Biggs comes to mind:

"Secular bear markets in the past have always taken valuations back to the levels at which the preceding bull market started, or even lower."

Considering that the bull market in gold miners started around 2001-2002 when gold was muddling about in the low $300s, it isn't far fetched to surmise that valuations are now lower than they were when the most recent bull market began.

The sector is deeply oversold, enough so that we can expect a 10-15% bounce to begin in the near future. However, it is unlikely that the ultimate bear market lows are in place.

Bob Moriarty of 321gold reminds us of a simple yet powerful market truth:

"At bottoms everyone is calling for lower prices. At tops everyone is calling for higher prices. Tomorrow is a full moon."