Commodities

Un Investment Idea

While the dollar has been acting as a governor for the price of most commodities, there are a few exceptions which are doing quite well thank you …. most notably, oil. Another that has caught my eye is Uranium. Since it has limited uses, highly regulated but reasonably low demand (unless you are North Korea) at 70-80 metric tons per year, it should come as no surprise the market is very thin and can fly under the radar of most investors.

One of the largest publicly traded Uranium companies is Cameco, CCJ. Based in Saskatoon Canada, CCJ is licensed to produce up to 26 tons annually. Unfortunately, the market for Uranium from 2014 through 2017 was a tough one as the price of CCJ fell almost 70% during that period. Since 2014 though, as you can see in the chart below, the character of the stock has changed, setting up for a potential directional change.  It has gone from one in a downtrend to one that has made a higher high and higher low from its oversold low. Notice also, the inverse head and shoulders bottoming pattern whose neckline is now being tested from underneath. An argument for the validity of a new trend change can be seen in the amount of shares being traded (bottom volume pane), as it has been more than 2x the average while forming the right shoulder of the large, almost two-year pattern.

San Ramon  retirement certified financial planner &napfa investment advisor - ccj 10-10-18.png

A break and hold above the neckline points to a target at ~$18 above, a 50% potential gain.  50% gain opportunities don’t come along too often and when they do they should pique an investors attention. This one has mine. For those who find this setup compelling, keep in addition to the normal single stock risk this one comes with additional baggage.  When you combine that with the fact nuclear power and weapons can, for many investors can elicit a “third rail” type of reaction and it is on the cusp of not meeting liquidity requirements, Financial Perspectives clients are unlikely to find this in their portfolios regardless of the upside potential any time soon. But those investors who invest only to make money and without regard to morals or personal beliefs, this is one for your consideration.

September 2018 Charts on the Move Video

The bulls were out in force as we closed out the third quarter. With the expected year end rally, 2018 looks to be another strong year for the market…. the US stock market. Bonds, commodities and foreign investments continue to under-perform and act as an anchor to portfolios. Mean reversion will eventually show up but, based upon the charts, Q42018 seems like more of the same.

My Q3 recap video can be viewed in the link below.

https://youtu.be/MgUbcV8Ckb8

August 2018 Charts on the Move Video

August was a barn-burner for stocks, specifically US stocks. The Nasdaq popped almost 6% and the rest of US stocks moved higher while most of the rest of the world equities fell.  Its a great time to be an investor in the current US market strength. As the pro's and big money come back from summer vacation will September follow August's lead and continue higher or will it offer something more challenging?  While we wait for this question to unfold, have a look at this months Charts on the Move video at the link below.....

https://youtu.be/6gf-MD3llM4

 

 

July 2018 Charts on the Move Video

US stock markets are leading the rest of the world higher.  The intermediate term rally in the dollar has either reversed or put the case for over-weighting foreign investments on hold. I think we muddle through the summer/autumn months and then rally into year-end.  Anyone thinking the same? 

July's Charts on the Move video can be viewed at the link below

https://youtu.be/lmdfJ5p16es

 

 

June 2018 Charts on the Move Video

Yawwwwwwwn.   Sideways chop within the Jan -Feb consolidation range until we see a catalyst. I thought maybe trade war fears would be enough to break the trend but apparently not.  Bulls are still in charge.  I don't expect to see a resolution for months so until then, sit back, enjoy the summer and check out this month's Charts on the Move video at the link below  ...

https://youtu.be/FLo_AyzWVeA