While the rest of the market struggles to get off the ground (ie tech and finance) – oil, metals and basic materials soar to new heights.  In the market report posted January 26th (sent to free members of SelfInvestors.com) I highlighted the oil industry as several stocks began to break out of consolidation, which proved to be the beginning of another major oil advance.  A few top rated SelfInvestors.com  oil stocks highlighted in the report have catapulted to gains of more than 30% since then! (specifically GDP and TGA).  Well, now steel stocks are beginning to make that same kind of move.  At the end of last week, several leading steel companies made tremendous moves, some with record buy volume indicating institutions are jumping in again with both feet.  You can see the thinking behind the purchase of Metal Management (MTLM) in a previous post.

The surge in metals doesn’t end with steel.  Copper, gold and silver are showing big buy interest in the last 10 days after struggling since the beginning of this year.  Below is a chart of the Gold and Silver Index, which has managed to clear both major sources of resistance (the 50 and 200 day moving averages) in the last several days.

Now lets take a look at a chart of the new gold ETF, streetTRACKS Gold Trust Shares (GLD).  As I’ve mentioned before, studying the movements of widely followed ETF’s gives you insight into the movements of industries that you can’t get with index charts, such as the Philadelphia Indices charts.  Reason being that the ETFs are traded like individual stocks and provide volume levels.  Volume levels reveal the conviction behind the move.. the greater the volume, the greater the conviction.

It shouldn’t come as a major surprise that the last big move in gold topped soon after the new gold ETF became available near the end of November.  It was the subject of much conversation on CNBC and it brought the idea of purchasing gold stock into the comfort zone of the average investor.  You know when the average investor begins to purchase anything in major quantities, the end of the run is near.. at least temporarily.  After a big shakeout, gold looks poised for another run.  The break above resistance of the downward trend line in black with good buy volume indicates that a bottom may have been found at 41.  I would expect some consolidation in the near term as it battles resistance of the 50 day moving average, but a sustained move up looks promising at this point.

The following is a screenshot of the Top Industries table in the SelfInvestors.com Premium area.  It’s a table that provides a quick look at top performing industries based on 10,20 and 30 day performance (only 10 and 20 are shown here).  The number in parenthesis indicate the number of stocks currently in the Breakout Tracker (breakouts and near breakouts).  You can see it’s been all about oil, metals and chemicals recently.