If you folks knew how many questions I get asking about specific markets and the future of certain markets, well, you would, I don’t know, you would know how many questions I get about specific markets and the future of certain markets, I guess. In any case, here is one I received …
- I got long on SHZ Friday with a break-even point of 8.37. I have a stop in @ 7.77. My target is to sell into any kind of rally toward new highs with most of my shares, and then try to hold a few shares if it makes a new high. Any thoughts on my trading approach?
First of all, China Shen Zhou Mining & Resources, Inc., through its subsidiaries, engages in exploring, developing, mining, processing, and distributing fluorite ore, zinc, copper, lead, and other nonferrous metals. Now that we know what, I can tell you that your approach is just fine, considering that SHZ is running past $10.60 this morning. If you have not sold, consider sitting tight for just a bit more, as the demand for these metals is rising and will continue to do so as economic recovery takes a deeper hold…
- What is your outlook on commodity prices, fertilizers, silver, and gold for the next 3-months and for 2011?
Soft commodities (food and staples) will continue to rise near term. Longer term, look to a softening (pun intended). Silver stabilizes and finds its range near and long term, gold drops more than bit in the near and longer term, and fertilizers will take off near and longer term.
- What impact will QE have on the prices of commodities?
Near term, QE drives all commodity prices higher; longer term, QE has relatively little impact. The driver will be the global economic recovery.
- Do you think the FED has created a new bubble with QE? If so, when do you see the bubble bursting?
Bubble, you say? QE is not a bubble. QE might create some bubbles in bonds, commodities, and equities. I have faith, however, that Bernanke and crew will engineer a soft landing with this stimulus.
- What will be the catalyst for any coming market corrections or crash?
The catalyst for market corrections in 2011 will be profit taking and consolidation, standard for any bull market. As to a possible crash, well, name your boogey man – Republican ideology (to raise or not to raise the debt ceiling), terrorist attack, or Korea flipping out and shooting off a nuke. Short of these, or some other unknown calamitous event, I don’t see a crash in 2011.
Trade in the day; invest in your life …
