Michael Michaud's  Instablog

The Market Last Week and Ahead

USA unemployment rate is now officially 10.2% and we are feeling more bullish on the Dollar right now. If unemployment continues to rise, that is not a good sign for GDP growth and stocks price increases. The stock market could be possibly topping out here along with precious metals, and commodities because of a possible continued global slowdown, so have a plan and exit strategies ready just in case the market starts going against you on the long side.

Major Economic Data Reports This Week

Tuesday: German Consumer Price Index

Wednesday: Bank of England Quarterly Inflation Report

Thursday: Australia Unemployment Report

Friday: Euro-Zone, German & French Gross Domestic Product

My Stock Pick This Week

It’s a short sell on a diversified Brazilian company. Long term I would be a buyer of this company, and just possibly a correction now as I speculate could happen, could provide a better buy-in price later. The NYSE & Nasdaq along with the rest of the global markets look to be possibly putting in a top right now. If this is the case and lower prices ensue for awhile, I suspect the Dollar to edge higher while stocks, precious metals, commodities could be heading lower with the anticipation of slowing global growth, and continued job layoffs. I’ve got a tight stop-loss on this because this stock could keep heading up considering all the positives it has going for it. Consider this sell recommendation as a buy at lower prices if you don’t want to short it now. So either, sell it now, cover, and reverse if you’re a trader, or wait for lower prices or buy in on the breakout as it’s very near its 52 week high.

Sell Short Companhia Vale do Rio Doce Brazil – Ticker VALE

Sell Entry: 28.88 to 27.03

Stop-Loss: 29.23

Take Profit Areas: 26.22 to 25.20, 24.30 to 23.89, 23.50 to 23.10, 21.59 to 21.23, 17.71 to 17.41

Company Profile

Companhia Vale do Rio Doce, through its subsidiaries, operates as a diversified metals and mining company worldwide. The company produces iron ore and iron ore pellets, nickel, manganese ore, ferroalloys, and kaolin. It also engages in producing bauxite, alumina, aluminum, copper, metallurgical and thermal coal, metallurgical coke and methanol, cobalt, potash, and other non-ferrous minerals, as well as precious metals, including platinum-group metals, gold, and silver. In addition, the company operates logistics systems in Brazil, including railroads, maritime terminals, and a port. Further, it engages in hydroelectric power generation and steel production. The company was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.

Click here to review and trial the Trading Software we used in determining our short sell position on VALE.

Click the Companhia Vale do Rio Doce Stock Chart for a larger view.