Rare Earth Update

A few days ago we blogged about rare earth being more valuable than gold. If you missed that blog posting on January 27th, you can read it here if you wish.

The stock mentioned in this blog posting was a stock trading on the NYSE named MOLYCORP, symbol MCP. Since that posting, MOLYCORP has moved up over 8 dollars in very active trading. In fact, the stock was up over 9% yesterday and up over 18% since we mentioned it to five days ago.

Take a quick look at the chart below and you can compare what we said back on the 27th right here.

I also mentioned that I own this stock personally and I want to be absolutely upfront with everyone on that fact. The market still looks very positive and we are waiting now for our weekly "Trade Triangles" to kick in. If and when that happens, I will be adding to my position.

It looks to me that we can see MOLYCORP trading in the high $60s or low $70s by the end of March.

Always remember there are risks involved in any investment and this is no different. I am moving my stops on MOLYCORP up to $44.45cents to protect capital.

Every success,

Adam Hewison

President of INO.com Co-founder of MarketClub

45 thoughts on “Rare Earth Update

  1. China authorized a meager 30,300 metric tons of rare earth elements to be shipped abroad in 2010, but industry analysts place global demand at roughly 50,000 tons a year! That’s why investment specialists are closely following Greenland Minerals and Energy Ltd. (GGG:ASX). They’ve just purchased an enormous, 20-year stock of rare earths and uranium on the southern tip of Greenland, and mining operations are expected to begin soon. Investment opportunities just don’t get better than this. (Shhhh!)

  2. Hi Adam,

    I read the news about MCP that the insider sold many shares today which caused the stock price went much lower during final hours. The trend seems moving upward for the last few days after a big drop because of secondary offering. The trend still looks upward and the trade triangle still in place and has a +90. How do you see the stock from here? The stock was at $50.25 during Pre market and went down all the way to the close.

    June

    1. June,

      Thanks for your feedback,

      The trend for MCP based on our Trade Triangle technology is indeed in a positive mode despite today's downturn.

      All the best,
      Adam

  3. 5 autos too much sell some and use the money in pzg gold and silver minor 3.5 now looking to sell by 2012 for 9-15 bucks,owns property next to barricks gold co.

  4. looks like about to bounce of 50 day like last time 45.50 area might get some monday if it doesnt keep falling. giant sell candle today friday might go down a little more almost time

  5. Hi Adam,

    How do you see the big drop today? I might get in too early at $52.30 as I saw the weekly trade triangle kicks in 2 days ago. I heard news talking about the secondary offering. Does that have any effect on the price movement?

    1. June,

      Disappointing market action today in MOLYCORP. However the trend remains positive providing the weekly trade triangle remains intact. At the moment you can buy MOLYCORP at a discount from our original buy signal at $53.80.

      Let's watch and see how the trade triangles work out.

      All the best,
      Adam

  6. Adam,

    Thanks for the MarketClub links. Your service seems to me to be potentially very valuable.

    The only reservation I am having is not about MarketClub but about your affiliate marketing. In fairness, as someone with considerable experience in this area, I know that affiliate products and services are often promoted by marketers without one having the time to do due diligence on the many available opportunities.

    I mention affiliate marketing because I have already received from INO an affiliate John Thomas/Wealth Insider Alliance mailing and today I received a stockpreacher.com mailing. These may appeal to the uninformed. Thomas boasts an absurd 99% track record over the past couple years as do some claiming to use his system who provide testimonials for him. A check today in Google on stockpreacher.com turned up some troubling "pump and dump" examples.

    In comparison, I receive daily forex, fixed income and commodities trading alerts from a former Head of Fixed Income Technical Analysis and Global Head of Technical Analysis at two well known global banks who has over twenty years experience. His two other associates have held similar positions over the past twenty years and all three have won several awards. The service is costly but worth it as I suspect MarketClub would be but there are no affiliate mailings. However, I think your affiliate promotions may be, perhaps quite unwittingly, detracting from your clearly knowledgeable and very helpful service and probity with MarketClub. let me be clear that affiliate marketing is great. My only concern is marketing products/services which are problematic.

    This does not mean I won't join MarketClub. I just felt I had to tell you how some of your affiliate products/services offerings might wrongly affect perceptions not only my but other traders perceptions.

    In case you're wondering why I would think of subscribing to MarketClub if I claim to be receiving daily trading alerts from highly knowledgeable traders the answer is simple. I do not believe in being a jack of all trades. I have no time to learn forex and futures in depth. Therefore, trading paid alerts is profitable (cost/benefit ratio) from experienced professionals therefore allows me to focus on other trading.

    1. Peter,

      Thank you once again for your feedback.

      Every major company has an affiliate program starting with the biggest of the all, Google. Unfortunately we have no control over our affiliates once they begin to market their own products. The chances are you signed up for something from our parent company INO was and ad from a paid advertiser. You must realize that running INO.com our parent company which is totally free is very expensive and the only way it can be supported is by advertising.

      MarketClub on the other hand, is a premium service that's why you don't see ads once you log into MarketClub. You will occasionally see guest blog postings about the markets and their experience and promote some of their wares. However the blog is open and is not password-protected like the real MarketClub site. I hope you make the decision to try out MarketClub. I'm confident that you will be happy using this product..

      All the best,
      Adam

  7. Adam,

    I agree 100% with your comment in response to John OS that "I could care less about who does what to the markets as long as I am on the right side of them." Too many people worry about how markets are manipulated and conspiracy theories. The bottom line is can someone trade successfully whatever the markets do? People need to focus on their technical and fundamental analysis, money management, position sizing, and trading in accordance with what best suits their psychological temperament.

    I must say I am becoming more and more interested in enrolling in Market Club. One question I have is whether you utilize software which screens a database of stocks for trading opportunities and/or if any stock can be entered in your system by members to test how they perform in accordance with your triangle system. I suppose your different portfolios might be the answer to my database question; or are there additional stocks you screen/monitor?

    Personally, I would not rely solely on your triangles as I have my own set of indicators but it seems increasingly attractive to have MC's indicators looking over my shoulder so to speak.

    The questions about your relationship with MCP are legitimate but I greatly appreciate the fact that you disclosed this at the outset.

    1. Peter,

      Thank you for your feedback.

      At MarketClub we have a number of tools that can help you scan through our huge database. You can scan for trade triangles on a daily, weekly or monthly basis and also scan for other types of formations like 52-week highs and 52 lows.

      You might want to take a few minutes and watch this quick video on our smart scan technology

      If you're interested in taking a risk free trial to MarketClub here is where you go.

      All the best,
      Adam

  8. I am 55 years old and aq complete novice to the financials market. I am out of work on a personal disability program. I would like to begin investing in stocks,bonds,& ETFs. I own approximately $15000 in physical gold and silver. I owe approximately $100,000 on signature line of credit ($69,000) and my childrens tuitions($35,000). I have $325,000 in:
    a regular traditional IRA $24,000
    401K- $300000.00
    I own 5 automobiles and have payments on 2 of them ($1200-2007 VW jetta and (8000) on a toyato Camry. All other cars are paid off.
    With this portfoio I have listed where/which stocks/commodities/bonds do you recommend me getting into with either my 401K or the $20,000 cash I have on hand?
    ALL questions are very appreciated. Thank you in advance for your recommendations.how much would you place in gold,silver,platinum or other minig stock compainies or gold and silver miner stock or gold and silver ETFs
    Could anyone out there give me some sound advise about where and why to invest today. Please go slowly as I am not very informed about how the market works. I will need as much material possible on the recommended positions.

    1. Marc,

      Thank you for your very detailed and honest posting.

      Learning to manage one’s money is a very important step in gaining financial independence. Here is what I would suggest for you, first of all learn how the markets work and you can do that with sites like MarketClub.com and other sites that are there.

      The next major step is not to listen to the talking heads on CNBC and Fox. They will get you all excited about market and if and when that market goes south meaning goes down, you are left to your own devices. That is not the way to trade to make money in the market place.

      The next step I would take is to look at some of the model portfolios we have in MarketClub.

      We have at the moment three portfolios for you to track. Here is where we give the levels in which to place your orders to get into a market and just as importantly levels to get you out of market.

      The “Perfect “R” portfolio is designed for retirement accounts like 401K and IRA accounts. You can look at information about that portfolio right here.

      The next portfolio is our “Global Strategy Portfolio” which tracks five different world markets through the use of ETF’s which are very popular with most investors.

      Our last portfolio is our “World Cup Portfolio” and this is a speculative portfolio which has shown returns in excess of 600% in the last three years.

      As we are not investment advisor’s I cannot advise you on what to buy and what to sell only you can do that. What I can suggest is that you may want to diversify your money and put 40% of your money into the “Perfect “R” and 40% of your money into the “Global Strategy Portfolio” and 10% into the “World Cup Portfolio”. Lastly, I would leave the remaining 10% into the money market.

      I hope this addresses and answers any questions that you may have.

      All the best, and every success in the future.

      Adam

    1. Jose,

      Thank you for your feedback.

      Here's what we used to analyze the ETF's markets.

      How "Trade Triangles" work in ETFs (PerFect "R" Portfolio)
      The major "Trade Triangle" to watch in trading the 4 ETFs in MarketClub's Perfect "R" Portfolio is the monthly "Trade Triangle" as this triangle determines the trend and your position. You would use the monthly GREEN "Trade Triangle" as an entry point and use the monthly RED "Trade Triangle" as an exit point. You would only reenter a long position if and when a GREEN monthly "Trade Triangle" kicked in. This portfolio is suitable for 401K and IRA retirement accounts therefore it is not allowed to short ETFs.

      How "Trade Triangles" work in ETFs (Global Strategy Portfolio)
      The major "Trade Triangle" to watch in trading this portfolio is the monthly "Trade Triangle" as this triangle determines the trend and initial positions. We use the weekly "Trade Triangles" for timing purposes. Let me give you an example, if the last monthly "Trade Triangle" is GREEN this indicates that the major trend is up for that ETF. You would then use the initial GREEN monthly "Trade Triangle" as an entry point and use the weekly RED "Trade Triangle" as an exit point. You would only reenter a long position if and when a GREEN weekly "Trade Triangle" kicked in. You would then use a weekly RED "Trade Triangle" as an exit point. Providing that a monthly GREEN "Trade Triangle" is in place the trend is positive for the ETF. The reverse is true if a RED monthly "Trade Triangle" shows that the trend is down. You would then use the weekly RED "Trade Triangle" for entering short positions and the GREEN weekly Trade Triangle exiting the market.

      All the best,
      Adam

  9. I understand, it's best to go with what you know works. Thanks and hopefully we'll see that $60-70 level very soon!

  10. Hi Adam,

    I want to get more knowledge learning about how to use the trade triangle before I feel confident in trading with it. Just start receiving Market Club reading materials and videos and found that they are very educational plus your personal comment and response to reader that really make me feel this would be the right start for me after trading so unsuccessfully for the last couple of years and lost almost my complete initial investment. I want to get an advice from your professional opinion. Do you recommend a new trader using a broker service or not?

    1. June,

      Here's what I would recommend.

      First learn how the markets really work on paper, then I would go about studying a program like MarketClub or something similar. If you systematically approach the market especially if you're a beginning trader you have a greater chance of success in my opinion.

      I would not listen to your broker for advice. I know I'll get into a lot of trouble indicating this but there's a vested interest in the broker seeing you trade more and more. The bottom line is most people who trade in the futures markets lose money and that's a fact. However the ones that do make money make a great deal of money.

      You may want to take a 30 day risk-free trial to MarketClub, the choice is yours.

      https://secure.ino.com/products/marketclub/

      Here's to future success.
      Adam

  11. Adam,I was comment #2 above.I still do not get it. You say with a weekly signal you will "add" to your position,do you not mean "re-enter" your position since according to the rules regarding red triangles you should be in cash right now,no?

    1. Jake,

      Should we get a weekly trade triangle in MOLYCORP symbol MCP this week we would take a new position, as that will be an official buy signal for our trade triangles.

      As I mentioned, I took a position earlier, if you wanted to be more conservative take a position if and when the weekly trade triangle kicks in.

      Officially we are neutral on this stock as a weekly triangle indicates that you should be on the sidelines until a green weekly trade triangle comes into play.

      Here are once again the rules for trading stocks using our trade triangle technology.

      How "Trade Triangles" work in stocks.
      The major "Trade Triangle" to watch in trading stocks is the monthly "Trade Triangle" as this triangle determines the trend. We use the weekly "Trade Triangles" for timing purposes. Let me give you an example, if the last monthly "Trade Triangle" is green this indicates that the major trend is up for that stock. You would then use the initial monthly "Trade Triangle" as an entry point and use the weekly red "Trade Triangle" as a stop out point. You would only reenter a long position if and when a green "Trade Triangle" kicked in. You would then use a weekly red "Trade Triangle" as a stop out point. Providing that a monthly green "Trade Triangle" is in place the trend is positive for the stock. The reverse is true if a red monthly "Trade Triangle" shows that the trend is down. You would then use the weekly "Trade Triangle" for entering and exiting the market.

      All the best,
      Adam

  12. what is everyone complaining about,if they went in on your rec they would be up. I thought mcp was overvalued after pullback to 25 but what did that get me=I missed 100% move thats all. Sometime a co's worth has nothing to do with stock price. eventually yes but not every week month or year

  13. Adam,

    I know you know your stuff but MCP is a very volatile stock. I believe you're right, it does look like it will touch $70 very soon but it retraces very hard. If you don't mind my asking, why not buy a few OTM Puts to protect your capital that way you don't get stopped out from the extreme price swings? The spreads are fairly tight due to the increased interest in MCP over the last few months.

    1. Justin,

      Thank you for your feedback.

      That's not a bad idea. However, the type of trading that I do is something that I'm used to and I don't like to deviate too far from what I know works for my trading personality.

      All the best,
      Adam

  14. Hi Adam,

    I totally agree with you regarding the first rule # TRADE with the TREND. I did all kind of technical analysis(including "Elliot Waves" and came to the realization that the market has to go down at least 5-10%.Unfortunately I didnt wait for some reversal sign in the market and entered few short positions -which, of course I am in a loss now.

    Iris

  15. Adam if you don't know that governments manipulate markerts, than you are three brain cells short of being a complete idiot. The Japanese government call them (the government intrusion into the market) PKO's or price keeping operations. Our government does the same. Former Fed govenor Heller wrote just such a article in the Wall Street Journal back in 1989 on how the Fed could use the Futures market to manipulat the Dow. Get real. The person who doesn't know who the mark is in a poker game is it.

    1. John,

      Thank you for your feedback.

      Is is so important to know why, who is doing what in the market or is it better to be right in the market.

      I could care less about who does what to the markets as long as I am on the right side of them. As a professional trader for many years and as a member of several major exchanges and having quite a few friend in the hedge fund business I can assure you that is how most traders think.

      #1 trade with the trend. Rule #2 Don't forget rule #1.

      Everything else is just BS talk amongst the talking heads.

      Adam

  16. Adam,

    Thanks for your reply. I see that my first post did get through so sorry for the replication.

    If you say that you aren't compensated - I say fair enough. I'm sure you're aware that there are plenty of sites that do pump stocks and do get compensated for doing it, so be assured that these questions are not meant in bad faith.

    I do think it's relevant to ask just about the percentage of your portfolio you have invested as it demonsstrates just how "much" you like it. For instance there's quite a bit of difference in a .01% ownership and a 10%. But on this I guess we agree to disagree.

    Best wishes and I have been considering using your method for a while now.

    Tom

    1. Tom,

      Thanks for your feedback.

      As far as what percentage of my portfolio do I have invested in MCP I answered that one before. It shouldn't make any difference to anyone out on the internet what percentage I own of any stock. Quite frankly, I regret saying that I even own this stock. I was just being honest and open about the fact that I did hold a position in the stock.

      Adam

  17. My first post didn't seem to get through so I'll try again.

    Adam,

    Have you personally or anyone connected with MarketClub received compensation of any type from MCP? Also, would you mind disclosing what percentage of your portfolio is invested in this company?

    Thanks very much.

    Tom Orten

    1. Tom,

      Simple answer, no one in our company has received any compensation from any stock or futures market including the stock MCP. We are not stock promoters. Far from it we are stock educators.

      As far as what percentage of my portfolio do I have invested in MCP I answered that one before. What difference does it make to anyone what percentage I own of any stock and quite frankly I regret saying that I even own this stock I was just being honest and open.

      Adam

  18. I prefer underlying value and MCP hasn't even got permission from CA to do the mining for rare earth and yet the price has run well ahead of earnings. I prefer the etf (REMX) and even little XING which has been buying up rare earth mines in China after starting out in the cell phone business several years ago.

  19. Hello Adam,

    I'm confused with your reply to Jake stating the "rules" for the Trade Triangles because based on the "rules" that you state here and elsewhere, you would have been out of MCP on the recent Red Weekly Trade Triangle, correct? According to your rules and in this example of MCP, the trend is up with a Green Monthly Trade Triangle, so when a Red Weekly Trade Triangle pops up, you would get out completely (also, I understand you would not short MCP here b/c the trend is up w/ the Green Monthly Trade Triangle still in effect). You would not get back into MCP until there's a Green Weekly Trade Triangle, correct? If so, this means that we would've completely missed the 18% move up - again, according to the trading rules using the Weekly and Monthly Trade Triangles.

    1. Pablo,

      Thank you for your feedback.

      Did you read my original blog posting on 27 January on rare earth? If you did, you would see that we indicate that a red weekly trade triangle was in place and that anyone following our trade triangle strategy for stocks in this particular stock would be on the sidelines.

      You are absolutely correct, you would buy this stock if and when a green weekly triangle comes in. That is pretty much what we said on the blog posting.

      I also indicated in that posting that I was long this market and that I would buy any two-day pullback which we saw. This was not a trade triangle trade. The trade would only take place when a green weekly.

      Every success,
      Adam

  20. Hi

    Almost all oscillators have a negative divergence,and the Market doesnt want to go down.

    How do you feel about the Market and what is your position?

    Iris

    1. Iris,

      Thank you for your feedback.

      The bottom line is all the trade triangles are positive indicating that the trend is still very much intact. Until that changes we want to stay in a positive mode for US equities.

      All the best,
      Adam

  21. Hello Adam,

    I have to say that I'm always a bit skeptical when a service such as yours touts a particular stock. This is not to say that the game is always rigged but it is to say that the potential is there. In some cases a service receives free stock or options or other compensation in exchange for recommending a particular stock.

    May I ask if any of those conditions are present in the case of MCP? And also when you say you own this stock will you disclose what percentage of your portfolio is involved?

    Thank you,

    Tom Orten

    1. Tom,

      Thank you for feedback.

      I'm not sure how long you been reading this blog, but the reality is we don't get paid for talking about stocks by anyone. Nor do we push stocks or any other markets. Lastly we are not brokers.

      We highly recommend our Trade Triangle technology which gives an unbiased opinion of stocks, futures, commodities, precious metals, and the foreign exchange markets.

      Quite frankly, I wish I had not mentioned that I own the stock simply because it may influence some folks who read this blog. When I posted the original post on rare earth on 27 January, the stock was trading around $45 a share. Anyone who read that posting had the opportunity, if they so desired to buy the stock. This is not a penny stock the kind to that get frequently touted on the Internet. This is a stock that trades on the New York Stock Exchange.

      As for disclosing what percentage of the stock I own my portfolio, sorry that's not public information nor is it pertinent to this blog.

      Wishing you every success,
      Adam

  22. The group is starting to move today. MCP looks great, and two other outfits that are solid, and have nice chart patterns, are QSURD and AVL, both rare earth mineral players based in Canada. Hang on tight.

  23. So after an 18% move up, you are thinking about buying again? Where were you on the buy down into $40?

    1. Dan,

      I would now wait to add to my position if and when we see a green weekly trade triangle triggered for this stock.

      Thanks for your feedback.

      Adam

  24. A much better buy with more upside it Avalon symboll AVL. Check it out. Everyone talks about Molycorp but there are other rare earth companies.

    1. Jake,

      Here are the rules for trading stocks.

      How "Trade Triangles" work in stocks.
      The major "Trade Triangle" to watch in trading stocks is the monthly "Trade Triangle" as this triangle determines the trend. We use the weekly "Trade Triangles" for timing purposes. Let me give you an example, if the last monthly "Trade Triangle" is green this indicates that the major trend is up for that stock. You would then use the initial monthly "Trade Triangle" as an entry point and use the weekly red "Trade Triangle" as a stop out point. You would only reenter a long position if and when a green "Trade Triangle" kicked in. You would then use a weekly red "Trade Triangle" as a stop out point. Providing that a monthly green "Trade Triangle" is in place the trend is positive for the stock. The reverse is true if a red monthly "Trade Triangle" shows that the trend is down. You would then use the weekly "Trade Triangle" for entering and exiting the market.

      Thanks,
      Adam

  25. I like playing momentum swings, but this one scares me. MCP has had negative earnings going a long way back. They are expecting just $13.5 Million in revenues for Q4 2010. These numbers are miniscule when looking at the Mcap of $4.3 Billion. This company isn't worth nearly what it's trading for and I suspect a lot of momentum traders will get hurt at some point. Mind those stops. Be careful everyone...

    -Spencer

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