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Watch Copper Futures and Turn off the TV (Part 2)

|Includes: Southern Copper Corporation (SCCO), SPY

On August 29th, 2010 I came out saying that copper was indicating that there was going to be a high probability of positive movement in the market. In particular, that copper mining companies such as SCCO are just not pricing properly relative to the metal they mine. Today I was proved correct as the market rallied on ISM Manufacturing numbers which beat expectations. There is only so much time in the day so in my opinion it's better to track copper futures than watch the talking heads on the tube.

In reality, top money that talks on places like CNBC was watching copper futures but none of them are going to give up the thoughts that get them paid by their investors. It's better for them to discuss the movement after the fact than to have money taken out of their back pocket.

If you had bought SCCO since we spoke you would be up about (10.24%). You can verify this on MyCaps by clicking on the percentage number in the previous line. Now even if SSCO didn't do well initially you would have still invested in a fundamentally sound company that is just an amazing gem out of favor by Wall Street analysts. Remember, the difference between following and achieving alpha is dependent on whether you can stay one step ahead of the Wall Street more often than not.

Is SSCO still a "buy" today you ask? Yes but I would wait to see if there is any pullpack on Friday. Worse than expected employment numbers released on Friday could cause the market to tumble and open up an opportunity to buy at a lower price. I feel SCCO has a good run ahead of it given the global economy continues to slowly recover and not relapse.

Stay tuned for my next post when I review the opportunity I see in the shipping industry and using the BDI (Baltic Dry Index) as another forward looking market indicator.

My Buy List: