While the mainstream financial media continues its round-the-clock gold/silver stakeout, the biggest near-term metals opportunity could be in an entirely unexpected direction. Right now, EWI's Metals Specialty Service has its eyes glued to "the other white metal": Aluminum.
Here's what you may know: Since hitting a three-year high in April 2011, aluminum prices have been on the down-and-down, plummeting to a one-year low on November 25.
Now, if you -- like most fundamental analysts -- look outside the market for clues as to where aluminum prices are trending, you're headed down a one-way street to nowhere. The reason being: the most recent events pertaining to the aluminum market point in entirely different directions. See:
- Bullish development: Rio Tinto [world's leading aluminum miner] invested $2.7 billion to the completion of an aluminum mine in British Columbia. This "suggests the company is expecting prices to be firmer" in the future. (December 5 Forbes)
- Bearish development: Goldman Sachs downgraded Alcoa, Inc [world's leading aluminum producer] from "buy" to "neutral" amidst "lower expected aluminum prices." (December 5 Forbes)
- Bullish development: China's [the world's largest consumer of aluminum] recent decision to lower bank reserves is a "major step to stopping the country's economic slowdown." (December 5 Associated Press)
- Bearish development: China's Shanghai Composite Index falls to a six-week low amidst concern that "weakness in the property market will pose a big threat to economic growth." (December 6 Bloomberg)
You get the picture -- a very conflicting one, that is.
We at EWI believe that the real key to staying on aluminum's trail is to look inside the market, at the internal measures that drive price trends: namely, Elliott wave structure, Fibonacci price targets, and a slew of supporting technical indicators.
That's what's been helping EWI's
Metals Specialty Service to anticipate aluminum's near-term trend changes BEFORE they happen.
Case in point: From its November 25 one-year low, aluminum has enjoyed a powerful rally. On November 25 -- the exact day aluminum prices turned up --
Metals Specialty Service daily update presented this timely insight:
"Over the past several days, aluminum has declined below its previous bottom and now we watch closely to see if [the decline] might be nearing completion. Watch closely for signs of a possible key upside reversal."
Then, on November 27,
Metals Specialty Service reinforced its near-term bullish aluminum outlook with this compelling price chart that shows a fully complete, five wave decline at its end.
Now, the latest
Metals Specialty Service updates tell you that in order to confirm a lasting bottom, prices must decisively penetrate
one key price area.