Alcoa train is picking up speed and momentum. [AA]

In these page I called the bottoming of Alcoa Aluminum and have been calling the play action from time to time since then.  The shares recently made a higher high than the peak of wave 1 and they did this after a flawless 50% fib retracement.  This is the kind of stuff that reliable bull runs are made of and the smart money loves high odds movements like this.  Alcoa is on track for my 18 in 18 target: $18 within 18 months and perhaps much sooner.

If this is a 3rd wave building right now then it should soon hit a 3rd of 3rd of 3rd where a very rapid price jump will be made - 20+% in a week kind of gains.

I reported earlier that the automobile industry is moving toward aluminum or steel-aluminum hybrids in order to increase fuel economy.   That will be one driver of Alcoa's success.  But another driver could be another hot money run into commodities.  Reuters is reporting a high concentration of LBMA copper metals ownership.  This is also happening at a time when the 10 year treasury chart is trying to decide if it is going to put in a double top and then break down or whether the fed should lose control of the bond market right here and right now.  I used to think that the red path was going to be taken in order to form an ending diagonal.  But that was driven by the fact that I'd seen so many of them play out like that of late.  At the same time I know that these things are cyclic.  Head and shoulders used to be the hot pattern back in 2008.  The market favors those who adapt to new realities and it is always testing the situational awareness and ability to adapt of the players.

Because of this I have to go with what I see here and now and it really looks like the chart has broken out of the down trend and then did a back test on the resistance turned support (RTS) line from above.  If this char makes a higher high, it suggests higher interest rates going forward despite the fed's promise to keep interest rates low indefinitely.  If rates go up because of the recent toe in the water tapering then how will the fed regain control of it??  They will have to do something.  Perhaps they will simply be so bold as to flip flop on the tapering.  Of course, just like Cracker Barrel's flip flop on attacking the Ducks, all that really does is show who is really in control.  One of these days very soon it will be revealed that the fed is not in control anymore and people will even begin to question if it ever was.

I continue to like hard assets and I see beaten down mining ETFs like GDX and COPX as excellent dollar cost averaging buys at these levels.  But it's Alcoa that I really like right here because of its recent break out.  You don't have to guess when buying interest will set in.  The buy interest is already apparent.