Goldman Sachs has just published a report entitled "Double Dip or Double Up?" which, revolutionarily for a brokerage firm - albeit one masquerading as a bank - calls the bottom and advises investors to dive back in. We think the correct answer is unequivocally Double Dip and prefer the analysis of ICAP's Nic Lenoir:

"The silver lining is always the same: private GDP has collapsed, and governments around the world are trying to prevent us from falling off the cliff artificially via stimulus, quantitative easing, accounting gimmicks, or data distortion.. The day we get weak equities, weak commodities, weak US Treasuries, and a weak US dollar.. well that day you better start praying because it means gravity just woke up."

David Fuller's view Let it never be said that you don't find both the bull and bear arguments on Fullermoney - Paulsen versus Rosenberg, Tan versus Price, Goldman versus Lenoir.

I hope this helps subscribers to make up their own minds, with the help of the Chart Library. You also know my view.


Fertilizer shares show renewed signs of life - Until recently, most fertilizer shares had been serial underperformers but they are following the decidedly firmer tone in grain and bean prices since I reviewed these commodities on 1st July. This is logical and both agricultural commodities and shares offer additional upside potential. I have used some p&f charts in this review because they can be useful as veteran subscribers know, if a bit fiddly to get the appropriate scale. I have also incorporated the new VAD indicator in the Library which can sometimes provide insights.


K+S (SDF GR) (p&f & weekly) has steadied within the middle recesses of what appears to be a lengthy base formation development. A recovery by this serial underperformer since June 2009 may require further patience as it only yields 0.51% but a break above last month's high just over €41 would provide additional evidence that the base is in its latter stages of development. Conversely, a break in the sequence of higher reaction lows, requiring a close at €35 on the p&f chart above would further delay recovery. Keep an eye on the VAD Indicator as it has improved recently.

KWS Saat (KWS GR) (p&f & weekly) is in seed cultivation rather than fertilizers. It appears to be in a lengthy first step above the base phase, so an upside breakout from the current range would be potentially very bullish. Watch for an upward trending VAD as evidence of accumulation. I prefer this pattern to K+S above and KWS currently yields 1.51%

Yara International (YAR NO) (p&f & weekly) saw its recovery checked with a downside weekly reversal in January but the share most recently saw upward dynamics in June and earlier this month. Yara yields 1.85% and its VAD shows that the share has been under accumulation recently.

Potash Corp of Saskatchewan (POT CN) (p&f & weekly) fell back from lateral resistance in March but has rebounded from the October low in what appears to have included a bout of short covering. Consequently some consolidation of these gains is likely but thereafter a close beneath the July low near C$88.70 would be required to question a further recovery. Potash yields 0.41% and its VAD recently broke a downtrend since March.

Agrium (AGU US) (p&f & weekly) checked its downward drift with a strong upward dynamic earlier this month. Here also some short covering appears likely and a partial reaction and consolidation is underway. If Agrium and Potash above can hold approximately half of their recent gains during this pause, prospects for an additional recovery over the medium term will be high. Interestingly, Argium's VAD did not fall that sharply during the share's fall from its March high, suggesting that selling pressure was not that great. Agrium yields only 0.19%.

Mosaic Co (MOS US) (p&f & weekly) also checked a steady slide with a strong rebound recently and is now consolidating recent gains. The VAD Indicator's ability to bottom recently above its October low, while the share was weaker, could bode well for the medium term but the opposite occurred at the highs shown on this daily chart so I am inclined to discount the latest reading. The share has rebounded from an area of prior support and only a close beneath the recent low would offset current scope for sideways to higher trading. Mosaic yields 0.45%.

Monsanto (MON US) (p&f & weekly) is a cultivator of seeds. The share had been a serial underperformer since its January high but bottomed with a key day reversal earlier this month, followed by a weekly key reversal as well. Short-covering gains are likely to be consolidated before long but if approximately half the recent gains are retained during this process I would expect further upside mean reversion towards the MA, at minimum. I do not see any clues in the share's VAD presently. Monsanto yields 1.85%.

DuPont (DD US) (p&f & weekly) is the most diversified of the companies listed here, by far, but this includes the agricultural industry. The share backed away from overhead resistance in April but has seen little erosion of support. A close beneath $33.50 would be required to question current scope for sideways to eventually higher ranging. I am unable to discern anything from the VAD at present. Monsanto yields 4.49% with coverage of 1.17%.