I normally focus my posts on hard asset stocks, but DRN jumped out at me. Interest rates backing up is starting to have an effect, IMO. The chart looks primed for a fall, and I see a potential measured move to the $37.50 area.
Slope of Hope Blog Posts
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POT, Up in Smoke? (by BKudla)
The Ag Chems, in my opinion are looking tired, and any additional dollar strength will push them lower. I intend to place a debit calendar put spread on POT, and add to or release my hedged leg upon a break of the black line drawn on my chart. AGU looks similarly patterned.
Three Short Candidates (by BKudla)
A filter I like to use is when the 20EMA falls below the 50. Today three diverse candidates from my Hard Asset list interest me. They are; DO, EC, and CSIQ. The 20 is my stop if I am wrong. For me, I will probably sell call spreads on these, as it is close to OPEX and I have high cash and margin levels from scaling out over the last week. I will see what the morning brings.
Shorting REE and MCP (by BKudla)
As I posted a month ago on rare earth companies being in a bubble are now playing out. MCP has just broke the 50 and REE is hovering over it, with both sporting very weak relative strength and accumulation. These stocks have a long way to fall and I will participate in this decline.
I also believe that the rare earth ETF marked the top.
Separating the Wheat From the Chaff (by BKudla)
I have been watching the grain markets with great interest since 2008 when we entered into this cyclical cooling period. As the earth cools it has a great impact on three major grain markets. Canada, Russia, and Australia. Russia has suffered a devastating collapse in their wheat harvests due to drought, Australia has gone from extreme drought to excessive rains and disease, and Canada's growing season has compressed due to early winter onset.
Two other macro issues are also in play, grains like all other hard assets are being bought to preserve wealth in the fiat folly policy underway around the world, and increasing middle class members around the world is raising consumption of said grains. As a result, grain inventory around the world has slipped to 90 days, a 11% decrease over the past year.
So in my view a perfect storm is coming for the grains.
Looking at the chart of JJG, it is ready to reengage its upward channel. When it broke below the channel the 20 never broke below the 50. I am a buyer (scale in) as it slips back into that channel.
Personally, we have been stockpiling flour and sugar to give us a cushion, if need be (remember the rice shortage).
