Where do we go from here?
A beaver once said that we’ve been topping for the past 30 days or so and maybe in his crystal ball he always knew March 1st was a bull trap that disguised itself since August. Conversely, I think we trade up and the bulls may be conceding higher highs to create a bear trap of larger magnitudes, or yet another opportunity to squeeze the shorts before we continue run up Bernanke’s escalator.
As seen in both the Dow Jones and S&P indicators shown below, we have rising wedges followed by breakdowns and subsequent bear flags. Do not fear, this has been the ongoing trend for the past few months where ambitious bears are getting their hands chopped off in the name of POMO/Bernanke/Inflation/A bull market.
Below, is our friend Dr. Copper. He’s been consolidating and testing a very important support level around the $4.555 mark. Copper is considered a strong indicator of global economic movement/trends. If we can see copper break this level, it should be the beginning of nice run for heat conductors. This could be a strong signal for the direction we will move tomorrow and the coming weeks.
Still loving the Gold, I think even if we sell off here, Gold will lag down and lead upwards. I’m still sitting in AVR.TO (March 22nd Earnings) and NGD.TO (Fridays Earnings baby!!!) seeing the benefit of gold’s run over the past week, nod to TJWP for selecting NGD as a laggard in the broad market.
I added two small Rare Earth plays this morning: UCU.V and GWG.V. Both UCU and GWG have comparable resource bases to AVL (Avalon) a new favorite on both the TSE and AMEX. Great Western Minerals (GWG) will be producing faster than Avalon and arguably REE, with concentrated resources specifically of the higher atomic Rares, the more valuable/demanded Rares. Of course I also still hold my hedge, a few OTM calls on the Dow Jones that have improved significantly over the last few days, however I would be happier to let them expire worthless.
Interesting article sent to me by a friend about a Mining company that acquired a copper producer in late 2010 that both TJWP and I threw extra oars in the water and powered a longboat up to well over $4 (NOM.TO).