What Commodity Bubble? Precious Metals, Rare Earth and Uranium Miners Rebound

By: Jeb Handwerger | Mon, Mar 12, 2012
Print Email

Far be it for Gold Stock Trades to indulge in hubris, nevertheless with all humility we not only saw this risk on rally forming in early October but reiterated on many occasions "be not dismayed by recent declines." "Commodities are not in a bubble." "Patience and Fortitude."

Recent action exemplifies the importance of not being trigger happy when it involves the commodity arena especially precious metals, uranium and rare earths. Volatility can daunt even the most resolute of investors.

Gold Stock Trades is once again vindicated in sticking with the ebbs and flows of the resource arena which often contrive to misdirect, confuse and obfuscate the impatient investor. The eventual payouts are worth the swings as we look forward to halcyon profits.

What does this all mean for our patient subscribers? When many respected gray beards were calling the end of what they thought was a bubble in precious metals (GDX), uranium (URA) and rare earths (REMX), our obvious conclusion was that even experienced so called experts were calling it wrong. There are morals to be drawn here.

Adhere to the long term cyclical upswing in natural resources specifically in gold (GLD), silver (SLV), copper (JJC), uranium and rare earths. Breakouts occurring in 2012 are filling gaps to the upside which were created in 2011.

Do not be dismayed of major corrections in the long range move upward of our chosen sectors. Downside gaps are in the process of being filled and are bullish moves. Do not be turned off by whipsaws often engineered by the speculators.

We are in the time interval of the first quarter, which is often a period of favorable seasonality. Hopefully, may this force be with us. There is a turbulent atmosphere pervading the world, wherein hard assets may be regarded as appropriate safe havens as banks are buying treasuries at a record pace.

Observe the convolutions of the Eurozone nations as they attempt to upright the various ships of state. On the other hand we have just seen where Caterpillar is backlogged in its orders of mining machinery. In fact, Caterpillar in their quarterly report has stated that the demand for their machines represent a bullish and growing activity in commodity production. Note the concurrent breakout in rare earths and uranium despite any diversion caused by the European travails.

Rare Earths breakout
Larger Image

In conclusion, 2012 breakouts in gold, silver, rare earths and uranium is a welcome confirmation to our analysis and bullish for precious metals. General equities have hit some resistance after making a powerful move since our October 4th buy signal.

We are witnessing a rotation from treasuries into equities and the precious metals and natural resources arena as investors are realizing that the outcome of Europe's 1 trillion dollar LTRO program may be hyper-inflationary. The S&P 500 is hitting resistance after a powerful upmove and we may see a rotation into undervalued commodities such as uranium and rare earths. The uranium miners have been rallying as Rio Tinto entered the Athabasca Basin. The heavy rare earth miners are starting their breakout moves as well as Molycorp (MCP) announces the $1.3 billion dollar acquisition of Neo Materials.

 


To stay up to the minute with current developments and to understand the deeper implications click here

 


 

Jeb Handwerger

Author: Jeb Handwerger

Jeb Handwerger
http://goldstocktrades.com

Jeb Handwerger

I started reading charts at eleven years old. One day my father, a market trader and technician found his library of books on technical analysis mysteriously disappearing. He later found the textbooks under my bed. For many years day and night I studied technical analysis and charting, working and learning from my father who has over 50 years of trading experience. Technical analysis is my passion and love.

In 2001, I started noticing the junior mining stocks and gold as having a tremendous upside. For the past 9 years I have researched many juniors and have identified the major winners using technical analysis and finding top management.

I earned a Bachelors Degree in Mathematics and a Masters Degree. I learned most of my technical analysis from the school of hard knocks, managing real money for myself and for my family.

Constantly perfecting my craft, I have traded for two decades of success in many different markets. I have been asked to post ideas to some of my students who have taken my course in charting and technical analysis. I have made an excellent living trading stocks for myself.

We are offering ideas for your consideration and education. We are not offering financial advice. None of our content is provided to invite or encourage any person to make any kind of investment decision. We are not financial advisors. We advise you to consult with a professional financial and investment advisor before relying on any content.

We are sharing our ideas for educational and informational purposes only. You must do your own due diligence and are responsible for your own investments.

Companies that are followed in our premium service may become sponsors on Gold Stock Trades and/or our free or affiliate websites to distribute press releases or corporate updates for a monthly fee on our free website. From time to time, Gold Stock Trades and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise. Please see our list of current sponsors and featured companies for any potential conflicts of interest.

Some information in our content can be construed as forward-looking statements. Forward looking statements are uncertain and actual results may differ from our expectations. We seek safe harbor.

By reading this disclaimer you will not hold responsible any person associated with http://goldstocktrades.com responsible for any losses that may occur from trading based on this information. If you do not agree with the terms of our disclaimer, do not access our website or content, and unsubscribe if you are already a member.

Sign up for my free newsletter where I will post my "up to the minute" ideas and analysis of the markets. Comment and ask questions as we are all learning and growing. Empower yourself and learn how to anticipate opportunities.

All material on my newsletter and blog is copyrighted.

Please contact us here with any questions, comments or interviews.

Copyright © 2010-2014 Jeb Handwerger

 

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/