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Today is May 18th, 2007, and I've hit bottom.  My rating is 4.00, my score is -100, and my accuracy hovering around 33%.  Certainly no one cares what I'm thinking, so this is just to record my rationale prior to my rating reversal.

My main investment interest is metal mining.  I'm using several indicators of future movements, but I'll just stress a few important items. 

I am watching the rate of change of the 3 month moving average of London Metal Exchange copper prices on the first of each month.  I've noted 2 clear trend reversal indicators. The sell signal is when price growth hits +5% and then +10%.  When it crosses +5%, it is a warning that copper prices are about to reverse, and it is time to clear out of copper mining stocks.  The copper price reversal occurs as the rate of change hits +10%, and that is too late to solidify the gains by selling.

The buy signal occurs when the rate of change drops from +10% to below 0%, but the price of copper doesn't increase for another 4 to 6 months.  During this dwell time, copper either moves sideways or drops, so it is a natural pause to start acquiring copper stocks.

 The last indicator is the monthly sum of Shanghai Futures Exchange Warehouse Stocks Weekly deliverable totals.  As you might expect, as the price of copper increases, the inventory increases.  Once stocks crest over 200,000 tonnes (metric tons), the price of copper begins to drop, and the stock dissipates.

Lastly, the 5 year price curves for Au, Cu, Al, and Ni follow similar trend directions and timing.  So I'm using copper indicators to give me buy and sell signals for miners of gold, copper, aluminum and nickel.  Awfully broadstroke and rough, but I don't want to become a daytrader - I want to select stocks and watch for the next few months to see if my perceptions are accurate. 

Wonderful theories.  Kinda like driving down the freeway using only the rear view mirror.  Here are my expectations:

Metal price growth will fall dramatically -  down to -5%.

Metal mining stocks will plummet and not recover for more than 6 months.

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No. of Recommendations: 0

Monday June 4th, 2007 update:  There are currently only 34 players doing worse than I am, which means that 99.885% of the field are beating me (that is a total of 29,623 better players!!!).  My score has dropped down to  -250.  So much for my ratings reversal.

I did not expect copper prices to continue to show such strength.  The warehouse stocks in Shanghai are at a staggeringly high level, as we head into a traditionally slower period for manufacturing. 

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