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2015/04/29

How to Make a Quick 20% as Copper Rises from the Dead

The rally no one saw coming ...
Rude Awakening
April 29, 2015
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How to Make a Quick
20% as Copper Rises
from the Dead

  • The rally no one saw coming
  • Base metals are back
  • Plus: What's your "sell" strategy?

Greg Guenthner coming to you from Baltimore, MD...

Greg Guenthner Wanna make money on both sides of a trade? Thought so...

We made out like bandits betting against copper in the past. Now we're going to cash in betting on copper for a short-term rally. That's right-- Dr. Copper's getting a second wind. And no one's paying attention.

Can't say that I blame them. This dog has been beaten to a pulp for years. Like I said, we've bet against copper a few times over the past 18 months. It was like stealing candy from a baby.

But something's different this time. The copper bears are capitulating. A stealth rally is in the works. And it could net you 20% gains in no time...

I told you last month that Dr. Copper lost his degree thanks to pesky technological advances. Semiconductors, my friend Andrew Thrasher explained, had become a much more reliable indicator of economic health. After all, it's tech-- not the industrial sector--that's fueling growth these days.

Copper's descent into oblivion is nothing new. It all started back in late November when Dr. Copper started acting loopy, dropping well below $3 for the first time since 2010. That capitulation move was essentially the previous decade's commodity boom unwinding.

From 2001 to 2011 the price of copper exploded more than 620%, topping out near $4.50. It's impossible to overstate the enormity of this rally. But that's ancient history now. The metal plunged below $2.50 earlier this year. Those were five-year lows. Brutal...

Here's the chart I showed you earlier this year as copper began falling apart at the seams:

Plunges like this one come lightning-fast. For copper the elevator down accelerated after the metal lost the $3 mark. Sagging demand in China and Europe was the final nail--especially when you consider that China was responsible for a whopping 40% of the world's copper consumption recently.

We highlighted the psychological importance of the $3 level in copper prices many times. And for the past several years copper managed to recover every time it breached $3. Before its November breakdown copper snuck below $3 last March. But it rallied back above the $3 mark by April. No such luck last fall. The good doctor's medical license was revoked and copper dropped nearly 20% in just three months.

But this is where your opportunity comes into play today...

Look at how copper appears to have bottomed out this month:

Copper dropped below $2.50 in late January on heavy trading volume. But buyers quickly stepped in. Now we're seeing the beginning stages of a potentially powerful comeback rally.

Now's the time to bet on a quick copper rally. You could easily net double-digit gains in a matter of weeks if this former loser starts cranking up the heat.

PS: Thanks so much for all of your concerned emails regarding the recent events in Baltimore. I'm just fine, as is our office on St. Paul Street. Right now, I'm looking forward to things getting back to normal--whatever that means. Until tomorrow...


But Who's Getting Rich From Currency Wars?

If you've read Jim Rickards' best-selling book Currency Wars, you've seen the dangers. But who is getting rich thanks to the aggression of these central bankers?

A recent study from MIT estimates that some Wall Street bankers have made as much as $653 million thanks to these currency wars. The New York Times reported that in-the-know traders have pocketed seven-figure checks. And a Japanese man made $182 million after a currency battle broke out in Japan.

But there's another way to play currency wars…. One designed specifically for regular Americans. Jim Rickards calls it the IMPACT System… and you can see it right here.


Rude Numbers

When to Buy... When to Sell
72

points were added to the Dow Jones Industrial Average yesterday. Will the big index continue to crawl toward its all-time highs this week?

$56.85

buys a barrel of crude today. Oil continues to sit tight after its big push higher...

$2.54
is the price of natural gas today. Natty is also hanging tough near its lows. It's unchanged on the day...
$1,207
is where you'll find gold futures this morning. Gold is off by about $6 after once again rallying above the $1,200 mark...
2,106

marks the spot for S&P futures just before the morning bell. Stocks are set to open lower this morning...


Rude Trends

When to Buy... When to Sell

"I just subscribed over the weekend and am in the process of evaluating this service for my use," a new PRO reader writes. I notice a very long list of holds-- one going back to October 2014. Do you have a recommended 'sell' strategy since few folks, I would think, can sustain such a large portfolio for many months on end? My impression from the advertising is that this is a short-term service."

Most of the trading ideas I send your way are of the short-term variety. By this, I mean it takes just a few weeks for them to play out.

The older trades on our list are built around some of our longer-term trading themes. We have four "trades of the year" designed to take advantage of some of the market's most powerful emerging trends. These are core positions you can maintain and trade around throughout the year--and possibly longer.

You might also notice that we sometimes have multiple plays on a single theme. We have a couple of different homebuilder plays, a few tech stocks, and two cybersecurity trades. Feel free to pick and choose which ones work for you.

As for selling, PRO readers always know what to sell and when to sell it. That's what the portfolio section is for! Click here to see for yourself...

[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]


Ignore At Your Own Peril

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