Sunday, August 11, 2013


Until the last week or so, you might have thought that gold, silver, and every metal on earth was worthless.  Chinese real data, or fake data was released and gave the shiny stuff and cyclical stuff a life saving does of drugs to perhaps stave off death for a month or two.  All intra-market analysis I do suggests that we are at extremes in terms of how far the US markets have gone relative to other markets.  It frankly may just be a cycle of cyclicals and emerging markets coming up a bit to bring things in line.  Here we go!


$1340 looks to be the magic number.  If I'd have to guess, I think we'll see a bit more upward momentum and then a slam down here for gold once again.  $1180 looks like support to keep loading up the truck for the zombie apocalypse.


Dare the shiny silver one get back into the channel of death?  Maybe.  If silver can climb just a bit further it has the possibility to go as high as $26, however if my hunch is correct, silver will fail and fall to the high $17 range.


China's latest doctored reports last week seems to be the saving grace for all cyclicals and copper.  JJC may be a nice option for the speculator looking to ride copper's recovery to $3.80.


I'd feel a bit more comfortable with a pound on the table buy for FCX if it were able to power convincingly over $32.  If it does, $39.00 is back in play.  Go long with a good surge higher.


Nice breakout here for Dupont.  It's hard to buy more here and with any overall market weakness, it is probably time to finally harvest nice gains.


Wish I'd bought this rather than watching for literally the last 2 years.  There is probably room for this to come down to the $39 area, which at that point would be just another opportunity to buy the dip, until proven otherwise.


CAT has been the victim of a terrible global growth story.  It has still managed to fight back from the scary free-fall in the summer of 2012 and December of that year.  For all its scratching and clawing to stay above the $80 level it just seems as though a break lower is inevitable.


EEM, the emerging market ETF looked like someone was going to put it out of its misery once and for all.  The bounce off of $35 was very nice and I fully expect to see an attack on the upper boundary of $42.  Will it succeed in going higher?  If it does, it is game on for all emerging markets and we'll see massive out-performance of them relative to domestic equity markets.


Inter-market analysis of emerging markets (EEM) to the S&P500 is shown here.  Since 2011, emerging markets have been under-performing significantly and we've gotten to the point where there HAS to be some reversion to the mean where emerging markets actually post some gains on a relative basis against the US markets.  There really has only been two other times since 2007 that the EEM:SPX relationship has been this low, and in both instances, emerging markets posted monster gains.  Please note, this does not mean that the US markets will go down, it simply means that emerging markets could really outshine and US markets could be seen as fully valued while shoppers choose the potential up and coming asset class.


As much as I've been a fan of Indonesia for years, the recent beat down of IDX has been heart-breaking and wallet destroying.  There is not option here, if you are a supporter of IDX, it must hold a close over $27 this week; otherwise it is a sell or a short candidate down to $24.


$15 is a potential destination for EWM the Malaysian etf.  I would look for pretty strong lower support and if it does not bounce, it too is a sell.


Support for EWS is at $13.25.  A move below this level brings the lower channel into play, almost a full dollar lower.


EWC (Canada) just looks to be locked in a battle between levels of support.  I think this is a very nice range to trade, however the area where EWC sits now is simply in no-man's land.  Wait for a move lower to $26 or a break higher to short at $29.


As China goes, EWA goes.  If we see good news from the Asian tiger, EWA will resume its ascent.


While not an emerging market, Japan certainly trades like it is.  Abe is showing the Fed its future, and while the threat of unlimited stimulus shocked the market for a time, we are finding that reality always comes back to bite you.  Sell Japan and anything not nailed down in Japan.  Toyota (TM) has had the mother of all moves, I think it is a fine time to sell.


Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at