Dow, oil, gold pulling back! What to do ... by Larry Edelson

The temporary market correction I've been looking for is here — both in the Dow and some key natural resources as well.

Oil is back under $78 per barrel. Gold is trading under $1,033 per ounce. The market averages are pulling back as well.

But these are just normal pullbacks that open up new buying opportunities. And they certainly change NONE of the compelling forces that are driving natural resources higher:

1. Supplies are dwindling rapidly: There's a finite limit to how much gold, oil, copper and other critical resources are available on Earth — and in many cases, supplies are stretched thin after decades of mining and drilling.

Plus, worldwide environmental regulations strictly limit the new supplies that could be brought to market. Even in the extremely unlikely event that these restrictions were eased, it would take years to develop new mines and new oilfields.

Conclusion: Normally, you could expect plunging supplies alone to push resource prices higher.

2. Massive new demand from China and India: Until recently, the lion's share of demand for critical natural resources came from the U.S. and other developed nations.

Not anymore! China's and India's economies are expected to grow their economies three, four, even five times faster than ours this year. More than a third of the world's population live in these two countries ... they're moving into the middle class ... and their demand for critical resources is skyrocketing.

Conclusion: This enormous new demand combined with dwindling global supplies can only drive resource prices higher.

3. The falling dollar: Despite last year's record-shattering $1.4 trillion deficit, Washington's spending, borrowing and money-printing binge continues unabated. As a result, global leaders and international financial authorities are calling for the U.S. dollar to be replaced as the world's reserve currency.

Conclusion: Until this dire situation changes, you can expect the greenback to continue plunging, driving the price we pay for critical resources ever-higher.

Resource stocks soaring up to 145%
in just three months!

I began urging you to buy natural resource investments with both hands three months ago. Now, in just the past 13 weeks, virtually ALL of my favorite resource investments have literally gone through the roof:

• IAMGOLD Corp is up 20.8% ...
  
  
• Anadarko Petroleum has risen 32.3% ...
  
  
• McMoRan Exploration has jumped 43.9% ...
  
  
• Pioneer Natural Resources has soared 58.7%, and ...
  
  
• Coeur d'Alene Mines has rocketed 60.7% higher.

And these aren't even the most spectacular winners in the natural resource sector — not by a long shot!

Over the same period ...

• Harvest Energy Trust is up 76.9% ...
  
  
• Petroquest Energy is up 85.6% ...
  
  
• Superior Well Services is up 91.2% ...
  
  
• Brigham Exploration is up 115.2%, and ...
  
  
• ATP Oil & Gas is up a whopping 145.4%.

All in just three, short months!

If you're already on board with a robust portfolio of resource stocks designed to help you profit from this monumental megatrend, great! If not, be sure to click here for my full report on this remarkable profit opportunity and make your move before I release a whole new set of recommendations next week.

Best wishes,

Larry Edelson

Technical analysis on 12 oct 2009 by Hwang DB S

The ascending channel pattern on the chart remains intact for the moment. This, in turn, raises the support
points and resistance bars along the way, suggesting that our Malaysian bourse could still plot a series of
higher highs and higher lows going forward.
After a short and shallow intermittent pullback, the bellwether FTSE Bursa Malaysia KLCI (FBM KLCI)
resumed its uptrend with a weekly increase of 27.6-point or 2.3% to settle at 1,233.82 last Friday. Also up
for the week were the FBM 70 Index (+2.0%) and the FBM ACE Index (+0.7%). An added positive was the
notable pick-up in trading activity, as daily average volume and value soared to 717.9m shares and RM1.2b
respectively, heavier than the 584.5m units worth RM844.9m traded the week before.
Even the external backdrop is changing to a bit more optimistic now. Last week, Asian equities mostly
rebounded from their preceding weeks’ losses, paced by China shares listed in Hong Kong (+8.4%), Hong
Kong (+5.5%) and Thailand (+3.1%). In the U.S., major stock barometers were up between 4.0% and 4.5%
through the week. Interestingly, the widely watched Dow Jones Industrial Average is presently standing at
9,865 (its highest close since the rally started in Mar this year), eyeing to surpass 10,000 (the psychological
barrier) soon.
In essence, the bits and pieces of positive data – on economic recovery progress and corporate profit
expectations – held together to stir up buying interest globally. Whether the incoming reports remain
pleasant or turn nasty would be the key in sustaining investors’ appetite for equities ahead. Of interest too is
the future direction of the US$ given its weakness lately, which could distort global money flows between
asset classes and geographical allocations if the greenback depreciates further.
Local news flows, on the other hand, will still be quite slow this week. Just a few items are anticipated to
trickle in. They are: (a) the Sep plantation statistics to be out on Monday (12 Oct); and (b) the Index of
Industrial Production (IPI) for Aug also due on Monday. That’s about all the routine macro stuff in the weekly
schedule, not that their outcomes will matter much anyway, in terms of short-term stock market
implications. On the corporate scene, however, there may be individual share price actions in response to
possible surprises when the likes of Public Bank (likely to be on Thursday, 15 Oct) and Bursa Malaysia (on
Friday, 16 Oct) release their quarterly earnings announcements.
Yet, light news may be good news for share prices back home. This can then pave the way for our domestic
stock market to track its overseas peers, though we may still lag in pace.
As the saying in technical analysis goes “never buck a trend as the trend is your friend”, we are keeping our
stance that the prevailing momentum will push the FBM KLCI – even after surging 47.5% from its mid-Mar
trough – to extend its uptrend inside the rising channel.
After bouncing up from the bottom of the two parallel trend lines last week, the benchmark index will
probably zigzag its way to challenge the resistance target of 1,255 next. On the downside, its immediate
resistance-turned-support level stands at 1,230 at the moment. Should the FBM KLCI break under the
upward sloping trend line in the near term on heavy profit-taking pressures, the second support line is seen
at 1,190.