A two in one update. First for traders only, a look at a stock I am adding for a tax loss, January effect type play; BRCM. Folks, I am not trying to turn sensible people into traders so please disregard this in the likely event that it is not for you.
Today could be an important one for the precious metals. The ‘jobs’ report was as strong as could have been expected, precious metals dropped hard on the knee jerk but have bounced back in pre-market. That reversal might mean something.
We have been noting the Canadian dollar along with several other currencies in NFTRH reports. The Aussie had broken down from support but Canada had clung to support despite a bearish looking pattern. This week it is in danger of losing that support.
Along the same lines as the trades in Palladium and the REE’s, another resources sector that is strategic to a positive economic environment is Uranium. The sector has been dead since Fukushima seemed to coincide with the end of the last commodity cycle in early 2011.
A disclaimer: I am long and/or trading several regular ‘bull stocks’ (as well as short a couple). Don’t interpret the sober message below as a ‘sell your stocks right now!’ style bearish warning. Indeed, after an expected choppy start to December I think more bull market mania, errr… rally, could still be ahead. But it would be just dandy if people would keep their perspective along the way.
From the December 1 edition of Notes From the Rabbit Hole (NFTRH 267):
Closing the 2008 ‘Gap’
In 2008 market and economic participants suffered a hard downside ‘gap’ in the prices of their assets and in the levels of their expectations. The bull market that began in March of 2009 is doing a fine job of closing that gap and fully resetting the herd from the utter fear mode of Q4, 2008 to a 2007 or even 1999 style greed mode today.
An update for would-be Tax Loss / ‘January Effect’ buyers…
As you may have noticed in the portfolio section of NFTRH 267, REMX was added for a diversified play on the REE sector. This is as much a tax loss and would-be ‘January effect’ play as anything else. Also, if the economy remains strong (ISM just out at a strong 57.3%) I would expect certain strategic commodities to eventually gain a bid in the first half of 2014.
GLD continues its death struggle with the neckline, is in a downtrend and remains on a bear signal.
We have been working a theme lately about the mania going on in US stocks (some valuations are not overly manic but policy sure is) and also the one going on in the mirror (a fun house mirror at that) in the ugly precious metals sector.
We are in a time of utter reverence for great and powerful Oz-like people doing not so great things to the rates of interest that would be paid to savers and prudent people (Zero Interest Rate Policy or ZIRP), and doing wonderful things for leverage (substance) users, speculators and asset owners (MBS and long-term T bond buying).
From the previous update: "If HUI can cross back over the 206.66 October [June] low, I’ll take even more note." Okay, so I am taking note... Here we go again…
I am tinkering around trying to see if I am comfortable with a more active trading opportunity aspect to the NFTRH service. As such, I found a low risk situation…
As we have been noting, the daily chart of HUI has a target of 168, which would be a theoretical Head on an Inverted H&S. Note the word theoretical, because…
Very simply, the October low was 211 for HUI. Other measures, like the GDX and GDXJ ETFs have already made lower lows. But today HUI dropped below and is making an attempt to hold 211.
