Platinum

Platinum has broken out of its channel range and possibly going into what Goldman Sachs would term a "super cycle". Look for the metal to continue to outperform its peers, especially due to the supply concerns again.

There is recent article on the affects of Platinum price and US auto sales that I believe again misrepresents the dynamic forces moving prices.

http://www.bloomberg.com/apps/news?pid=20601012&sid=abzKqd6jaEBA&refer=commodities

The fact is that auto sales and growth aren't in the US. The growth continues to come from emerging markets, although it will come in the smaller, lower margined car markets, thus creating the demand for platinum, and all other commodites, no matter what the US is doing with it's auto, or any other purchasing in general. When these shifts change the first conclusion is most often the wrong conclusion, so with people focusing on the muddled US economy when looking at commodity pricing - most likely they are not seeing the true landscape, especially with what has happened to OIL despite the slow US economy. The rise of commodity prices is a byproduct of worldly demand-pull inflation, thereby creating rising prices for the US economy while were in the midst of major changes to our financial system. This also leads to stagflation as the credit woes deteriorate our wealth factors - but were not going to try and become economists, were just going to analyze the charts.

SWC - Stillwater mining will be a major beneficiary of any swings in price and with the last run at the beginning of the year, and after a consolidation, SWC has triggered a buy signal.

Palladium

Palladium has consolidated since its run to 600 on supply concerns out of South Africa - a pennant is now forming which shows a near term run to 600 is evident. As production continues to decrease, the price will continue to increase. Palladium has many uses, but the main use is in catalytic converters which are an environmental necessity on all cars in the US, and again as the demand continues to come from overseas, and as emerging economies modernize, envrionmental standards will change and be another catalyst for continued demand. The supply/demand picture favors higher prices and the technicals back this thesis up.

Citigroup - 3 ways to play

Three ways to play Citigroup from a technical standpoint:

Scalp trade: sell at the dotted line - buy again when it corrects - but you have to be extremely fast.

Swing Trade: sell at the the solid line - wait for pull back to the dotted line and buy again.

Long Term Trade: take the 5% dividend and believe that C will trade in the 30's at the end of 09.

Citigroup's technicals are showing signs of improving. The RSI is near the bottom range, although we have not seen it cross below 30 to create a colorful and more convincing penetration: this is why you would start averaging into it here to be sure you are in the game, but your not the only one on the court.

Also, the Money Flow has started to show positive divergence and the volume is increasing here on the right side of the potential double bottom.

The MACD's have been carving itself out below the neutral line with a postive bias since the October plunge, with a penetration recently to +1, and now a retracement to -1. Remember, that right there is parallel divergence - a run back to 0 should be in order.

Sell stop at 17.5 to enable risk management.

As sweet as Krispy Kreme.

As the restructuring continues, the technicals improve.LT Bottom could be in place.

Micron - MU - Accumulate.

Technicals:

-AROON popped showing the correction is now here and accumulation is evident.
-MA's are showing the support/resistance zones.
-Double Bottom
-MACD's testing neutral




Micron has pulled back after double bottoming and running from 5.5 to almost 9 dollars. This recent retracement will take some time, but this is where one should be accumulating. Semiconductors will lead the technology recovery(see blog post "The Other Commodity"). I also have included the DRAM pricing with MU because the semi's are nothing more than a commodity, but rather than it be a commodity of nature, it's a commodity of "humanity" - meaning it's a byproduct of our human intelligence and the initialization into the technological world we will continue to advance into. DRAM prices are stable, and are slightly trending higher.





http://www.dramexchange.com/watch/price_index_main_new.asp





The correlation between stock price and commodity price is real, so watch for this correlated relationship, but MU is for sure a continued accumulation as Pollux Technicals believes the next great bull is in Semiconductors.

Trading Dryships - BUY

Things to consider unrelated to Technical Analysis:

- Shipping Rates

- Merchant Shipping Capacity

- Dow Theory(transports) - Shipping is the global equivalent.

This one is a beautiful looking chart that has many great technicals that are easy to identify. We recently bought DRYS at 60 - near the end of the triangle in the first chart - and sold it incrementally on its way to 110. Sold 1/3 at 85, 1/3 at 95 and the last1/3 at 110. As it drifted to 115 and near the resistance from the peak of October, we went short because of the technical divergences and have now covered all short positions.

Now DRYS is pulling a great technical shift again. Let's look at the MACD's on the 2nd chart near the neutral line, in which will test if the trend can continue upwards. The AROON recenly popped negative which sometimes indicates a lagging market, or another words, the selling is now nearing an end. The entry point is where the technicals could shift, and also look at the MA's which is where major support exists.

We will place a sell-stop at around 68 which is well below where the stock is now, but this is the risk management portion of what a good trader will always keep in mind. At these levels, DRYS is a buy.

UNG - Breakout

Technical Breakout! - We need confirmation on volume and a move towards the 60, but the UNG does look poised for upward trending. Natural Gas seems to be less lofty than oil and makes for a good alternative that can really eat away at Oils market share.