Today Jan. 18, 2011

Increased volume on an upmove in the major indexes today. Even better volume on the emerging markets index (EEM) and the small caps (IWM). The markets have had several opportunities to sell off and haven't so this is a good indicator. Maybe the big investment banks are on the sidelines.(see previous post)
The S&P:

Interesting price action in SLV today, the silver ETF. Buying on above average volume all morning. SLV looks to break the downtrend line soon. That is the first sign of a change in trend. Silver is not only a flight to safety, but more so an inflation hedge and an industrial metal. Buying could signal that investors are looking to a pick-up in physical demand or a pick-up in inflation. My feeling is that the market is in the process of changing from deflationary fears over Europe, and by sometime late this year or next we may be back where we were in 2010 as far as inflation goes. Time will tell. Here is the chart of SLV:

Not time to get excited yet, tho. When and if we get to about $35 things should be getting heated up!
The same applies to Dr. Copper: Things will get going when and if we get above about $36.

FCX is looking good. Highlighted in an earler post....I bought some GoldCorp today. It didn't act the way I thought, but haven't sold it yet. There may be a changing of hands in the gold market from those who took safety from the Euro and deflation, to those who are worried of inflation. Gold can profit from both but it takes time for the  paradigm to shift. The gold STOCKS were not a good bet deflationwise, but usually boom when things start heating up in the metals markets. And the US smallcap stocks and the emerging markets, for the investors.....

These two areas are where I am "invested" for the longer haul.....
Good luck. Now back to the Merlot......
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