This Week in Charts - Natural Resource Update

After this past weeks natural resource correction, I figured I'd check the sectors for status update.

Below are the charts. I think buying any precious metals this week is risky after such heavy losses.

So why am I buying? Because the media loved to report on how things fell, how gas will be cheaper this summer, etc. Also, some of the charts don't look too damaged yet.

Of course, I won't go full in, the losses could continue.

But I avoided most of the damage, so why not jump on in? To the charts!

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

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USD hits all time low....what is next?

CORRECTION, did NOT HIT 2008 lows, hit 2009 lows. See this link

http://websurfinmurf.blogspot.com/2011/04/correctionusd-broke-2009-lows-not-2008.html

No country in history has flourished with a free floating currency devaluing as a driver.

The question is, how much lower? As the currencies go lower, precious metals explode higher, as other natural resources can go higher.

Could this be the start of the end of the USD? Making not marginal lows but drastic lows from her? Could the USD enter into a death spiral here and now resulting in USD failure?

All of this is possible, anyone who says it isn't possible has a faith based bias on alternate viewpoints. The facts clearly say it is POSSIBLE, but I must agree, not PROBABLE.

Why not probable? Same as it has been since 2008, if the USD implodes, so goes the world. The world hasn't taken enough steps to decouple from USD as the reserve currency. It has made huge progress, and I predict will be ready for USD collapse 2014+, but not yet.

Back to the FACTS about this situation
1) S&P announced DOWNGRADING US credit worthiness, first (baby) step in currency collapse

2) USD hits new LOW, breaking 2008 low. Note the last time this happened, the Fed collapse the market to force people into the USD, contributing to the 2008 market crash.

3) Rumors that China is to increase YUAN valuation by 10%, a significant shift for world's second largest economy. (not fact per say, but we'll know soon)

4) The US government has proposed NO REAL debt reform, forcing dollar lower.

5) Gold, Silver, and precious metals are breaking to the up side.

6) 30 year US treasury rates are going LOWER not HIGHER

Given above and all other information, its very confusing what to do. Gary of the Smart Money tracker gave a tepid partial buy here and now. I bought in SLIGHTLY yesterday back into AVL and AGQ.

So what am I doing? Keeping my core positions through whatever happens, tinie-tiny buy above, and rest cash with a couple of shorts.

SEE UPDATE link

Monday I'll re-evaluate, for if the USD is headed into the abyss, I doubt it collapses over night, there will be time to jump onto precious metals and out of cash. I fear the weekend, for that is when politics announces major changes, shifting the market. The USD is so stretched low, it could jump overnight and crush metals. This is more possible than USD overnight crash.

For this reason, for me its a holding pattern. Good luck. See USD charts below.

All systems are go

Gold breaks to new highs, gold miners breaking out, avl looking great, all systems are go.

Every cent I can is deployed with almost no shorts to be found. SLW has been a big mover, as my favorite AVL.

Other stocks that jumped today are GSS, AUY, GDX, IAG, IVN. Others with only 2-3% gain are NAK, NXG, RGLD, IVN, HMY and ANO.

GLD, PSLV didn't do so bad either.

For now, the world looks great in resources, especially precious metals and miners.

Good luck, and although nothing has been fixed in the economy, for now, its up up up and away.

Percent gains have been very welcome the last few weeks. Hard to hang on for this upswing.

Trade idea I like is Uranium sector on Slope of Hope, they got slammed with Japan problems.

Uranium is here to stay with china building crazy number of reactors.

In particular, some decent risk play is DNN and CCJ.

And I agree AAPL stock owners should take heed and put stops in, click to read more.

AVL

AVL is a company that is targeting opening a new rare earth mining operation latter half of 2011. Since that operation has not yet opened, significant risks are present as an investment.

Originally mentioned this stock when it was placed into S&P 500 mining index (click) and have mentioned it numerous times, including Monday. (click)

AVL Chart below, my advice is worthless, since I am not a financial advisor, so seek professional advisor before making any investment. This is not a solicitation, but it is a document of my observations from my (not all) perspective.

From WebSufinMurfs FinancialBlog2

This Week in Charts

First, let me start off with a stock I have extreme interest in, AVL.

Part of my interest is a bought a few shares at 3 bucks, and it hit over 8 bucks.

The other part is I have good faith this stock does well in the years to come.

Right now I am hoping it pulls back a little so I can add more with less risk.

Other than AVL chart, the rest is usual suspects. Nothing really exciting except looking to see if S&P500 can manage to go above 1330 range. Keep in mind the Supreme Court ruled AGAINST the Federal Reserve bank on keeping secrecy on their tax payer money games. I am not sure when they must report, but I believe its any day now.

To the charts!

From WebSufinMurfs FinancialBlog2

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Market Correction, one day wonder or trend?

Just about everything was punished in the market Tuesday, EXCEPT Gold, Silver, and Oil.

Notice the core resources are holding up quite well.

GLD - Gold ETF - up (barely)

SLV - Silver ETF - up

USL/USO - Oil ETF - up

GDX - Gold miners - down less than 1%

GDXJ - small gold miners - Got hit somewhat , down 2.4%

SLW - Silver Wheaton - Down under 0.5%

PAAS - Pan American Silver - up 0.7%

DBO - Food ETF - up 3%

Example of resources slammed.

AVL - Rare earth minerals - did get hurt badly, down 5.6% in one day.

RJA - Food ETF - down 5%

The real story, as since I started this blog, is long term interest rates (TNX/TYX)

Rates did go down, about 2-3%. In bonds for a day, thats pretty big. But it isn't enough. 30 year bond rates must drop 30% lower to get solidly back into the 25 year trend down.

The other real story is US dollar. I may make a post, and ask my friend happy john to comment.

In my opinion, if USD breaks below the low made in the last year, then natural resources is the ONLY place to be. If USD can keep its value and start advancing, fixed income is best.

Time will tell, good luck.

Rare Earth Minerals

I listened to a pod cast last month that got me into Rare Earth mineral. For some reason, I didn't blog it. Kept slipping my mind, I thought I had posted on this.

At the time, I bought AVARF and LYSCF, both pink sheet stocks, priced 3.11 and 1.70 respectively at the time.

Unfortunately, I missed the announcement that AVARF was going off pink sheets with new symbol AVL and being placed into the S&P 500 ETF named TSX, announced December 20th.

The stock has started a significant rise, one I expect to be a long one for AVL.

Today it hit a high of $7.18, but beware (130% gain), this week stocks are trading with odd volumes being a holiday week. This could be a pop that goes back down. But I doubt this stock will see sub-4 bucks again.

The volume has been huge, over 8 million shares traded today. When I bought this stock it traded at about 100,00 shares a day.

So jump in now at your own risk. At this price we could see a pop just below 5 bucks to get people shaken out, but it could also make a blazing run much higher.

If you don't know about rare earth minerals, I mentioned it in a previous post (click).

China mines 95% of the worlds rare earth minerals, many of which are key to high tech electronics, military weapons, and new energy technology. (solar, wind, etc).

China has also announced they plan to limit the rare earth exports in raw form, basically blackmailing the world to manufacture products in China, since they own the raw materials.

Since rare earths are in the category of resources, I like the play.

I added to my position, but I am late to the party, if I wasn't sleeping at the wheel, I would have bought more when it broke through 5 bucks.

I may continually add to this position if it continues to rise. A stock fresh out of pink sheets may have quite a bit of room to run.