I read a lot about the interest in raw materials that should be a good investment in the long term, since many developing countries will keep on growing. Do you have any opinion about investing in the rare earth elements http://osoon.ut.ee/~hahha/re/ about which I heard some interest? http://www.hybridcars.com/hybrid-invest.html
Do you have any information about this Canadian company GWG.V dealing with these resources?
http://finance.google.com/finance?q=gwg.v&hl=en

I'm relatively new to technical analysis, but have been investing for a good number of years. Just thought I'd share an interesting situation I've been looking at and invite any other opinions, (particularly any other interpretations of what's going on with this stock).

Norbord, NBD on the TSX, is a particleboard manufacturer. It's an industry that isn't doing too well currently with the housing downturn in the U.S., but the company seems to be high quality, (good pedigree), and well managed. UBS warned on most forestry product companies, but remained rather neutral on this one.

If I'm doing the analysis right, a positive divergence has formed and it looks like a bullish crossover is imminent. Perhaps the negative near-term outlook has been factored into the current price and the stock price outlook is positive.

Re: Gold,

I know others are still calling for a retest of $540 level, but, IMO (and this is just my opinion), gold tested the lows with a higher low.

Numerous articles are pointing towards the recent price weakness forming strong demand for physical gold from India, Russia, others. I am guessing that this demand will form support higher than the recent low that I am now calling the test.

Paper gold traders are probably listening to their computers (computers that don't look at the big, fundamental picture, btw) and are going to short or defend their current short positions at:
$600 round number
$601 200 dma
$602 50 dma
Looks like a lot of resistance to push through, BUT, and this may be a big BUT, if we go higher than $602 we will have continued short covering (that I mentioned a few days ago) and then if we can get through the downtrend line at roughly $610 (roughly), gold will be: over both the 50 and 200 dma, 50 dma over the 200 dma, downtrend line will be broken, RSI 14 will be over 50 and going higher (positive for mo mo traders). This will lead to momentum traders getting back in and if the stock market is falling at the time, a lot of money will move into long gold positions.

BTW, the $usd is turning down from an overbought position which, if it continues, will be bullish for gold.

I did not see this in my crystal ball, Bill still has the only one that I know of, it is just one scenario that I am looking at.

Newbies: this is spot gold, not the Dec futures that I see often quoted on CNBC, TV etc. So the futures numbers are slightly higher - please don't get confused.

Good luck to all.

Lelik -

I liked your "way out of the box" question on rare earth elements. A quick goggle didn't yield much on where and how they are sold (i.e. whether prices are rising) but an interesting USGS webpage on US dependence upon CHINA for 90% of US REE consumption.

http://pubs.usgs.gov/fs/2002/fs087-02/

Apparently there is one US mine for REE, but environmental concerns have limited production.

Anybody else know anything about this area. Intuitively, minerals needed for high-tech manufacuring seem a more arractive physical asset to hold than the yellow relic (gold).

Manx928,

You are correct in your technical assesment of NBD. The RSI7 low in October was higher than the September one. The price action was of course the opposite. However, the price move has already happened. The trend is also not your friend. The 50 and 200 DMA is clearly heading down so a long position here is only worth a try with a tight stop.

If you really want to be in this trade, try putting a portion of your position now and another after a close above the 50 DMA. Initial stop at C$8.20 and close out your position below C$7.70.

Keep in mind though that trees are not a great place to be trading right now in Canada: Dollar strength, Softwood lumber agreement, ... etc.

g034 that's an interesting scenario....
I guess we would have to see gold decouple from oil unless oil is also going to move up now...

Speaking of oil - if XOI pops to 1150 or so that
would be a point where everyone who is a bear on energy stocks would be shorting again if it fails to hold.

btw OPEC has delayed their meeting now until 3:30pm ET.

I'm flat both now - but would play the momentum if what you suggest transpires.

Jock,
In 1992, Deng Xiaoping, then ruler of China, put the world on notice with the following statement:
In 1992, Deng Xiaoping, then ruler of China, put the world on notice with the following statement:

“There is oil in the Middle East; there is rare earth in China.�

The link: http://www.theanchorhouse.com/

has the complete article, Rare Earth May Be China's Checkmate.

... forgot to add to the previous post...

that with tomorrow being options day... and also with the oil contract expiring tomorrow - alot of 'funny' things happen around these

ie: they try to move prices to where they want them to be.

- at least that's been my experience - and i have been burned a few times when things are at key levels (like $60 oil, $600 gold, or XOI at some key level etc..) - and you make a trade a day of so before the expiry - these can often be reversal points

(obviously one should be positioned prior to the expiry)

I prefer to trade out prior to these points- and then trade the momentum on any reaction - but maybe thats me - sometimes I have a 'short' attention span?

The rare earths potential was raised on a posting here in the past couple of weeks.

IMO China has driven the competition out due it's low production costs. Although China has the lion's share of the global resource. Holding the world to ransom, if that were to happen?, should provide the incentive for inactive operations to restart and new ventures commence . The attached report provides some data that may help paint the picture and understand where the best trading opportunies will be!

http://pubs.usgs.gov/fs/2002/fs087-02/

My aplogies for reposting what Jock had previously stated. Must have had a cached level of the thread when I posted or perhaps my first senior moment :-)

Cara 100 stock GS, RSI7 > 70 daily, weekly, monthly UNTIL today. RSI7 daily breaking below 70. Me, I'm short at 181.15. Seems to be breaking badly. Might be a nice short if the market breaks down.

...david... Good luck..