Click chart to enlargeDBA is still consolidating awesome first quarter gains. It has formed a descending triangle, and will break out one way or the other very soon. If it breaks down, we're expecting a capitulation (major buying opportunity) in the Ag names followed by a continuation of the uptrend for the rest of the year. This is the preferred outcome, as it would create some very low intraday prices. As long as DBA stays above its 200dma (blue line), it is in a long term bull trend. If it breaks to the upside instead, then the recent lows in the Ag names are likely to hold. This would be a less dramatic bottom, and would not provide for anything other than an "average" buying opportunity. We like the "people jumping out of buildings" type selloff, but those are few and far between.
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Question for Snot and other knowledgeable posters who thoughts I appreciate. Is there a concrete/materials company in China that might be a good play right now with all of the post-earthquake rebuilding that needs to be done?
Check out this article for china concrete
Anhui Conch Cement
Don't know much about China material plays. Check out SDTH just for kicks.
Today was a great day for Ag. Today's strength does not guarantee that we'll begin a new leg up, but it does show strong demand. We're hoping for a retest of recent lows and perhaps a momentary break of them for even better prices.
Some would say that today's move needs follow-through. It's true, but be patient. Although it may start out strong, tomorrow will not likely be a strong up day for Ag. Too many traders will be taking short term profits. Follow-through is something that plays out over several sessions and sometimes over a few weeks. It isn't a day-chart phenomenon.
Question for all investors haunting Snot's blog. With the energy crisis upon us, it is reported that more people are using public transportation. Is there any sort of equity play that would take advantage of this? Or is all of this mostly the corner or municipal and state governments? Thanks as always for the knowledge and thoughts of all posters.
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