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Playing the Ponzi
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Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step... More
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Playing the Ponzi
  • Commodities And Emerging Markets Climbing 0 comments
    Mar 28, 2014 1:50 PM | about stocks: JJG, CORN, JO, ARCH, EEM, EWZ, EPI, GLD, SLV, GDX, GDXJ

    I have noted that I read the major U.S. indexes as being near the end of multi-year bearish rising wedge patterns. Now for a little bullishness. Many commodities have performed very well in the new year, especially agriculture plays. Things like coffee (NYSEARCA:JO) and corn (NYSEARCA:CORN) have broken above trend line resistance. Their performance is summarized by the grain sector ETF, JJG.

    (click to enlarge)

    Chris Kimble pointed out that some coal names look appealing, and I must agree. ACI, which has beaten down mercilessly over the last two years, may be ready to run higher.

    (click to enlarge)

    Emerging markets (NYSEARCA:EEM) have also broken to the upside of resistance.

    (click to enlarge)

    India (NYSEARCA:EPI) remains my favorite play in the group, as it may have an inverse (thus, bullish) head and shoulders in the rear view mirror. But Brazil (NYSEARCA:EWZ) and many others look ready to rally for a bit.

    One interesting sidelight is the behavior of precious metals. Gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV) have sold off hard in recent weeks, as have precious metals miners (GDX, GDXJ). It has made for an ugly breakdown of their early-year uptrend. The hope for bulls is that support shows itself soon, forming the right shoulder in an inverse head-and-shoulder pattern for miners. We shall see.

    (click to enlarge)

    Disclosure: I am long JJG, GDXJ.

    Additional disclosure: Long EPI and ACI calls

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