We Were Right on MCP, Now Lets Make Money

MCP has been one long I and many of you have stuck with for a long time because of the charts, they suggested something big was going on there, something smart money knew that we didn't and the charts were enough to just let MCP sit on the back burner until we found out (other than the occasional options trade there which have been profitable).

I don't know how many times I've said it although you can pull up a search on the members' site, but this is from July 10th, MCP Charts

"For some newer members we had a similar trade in RIMM where the long term 3C charts looked great, but RIMMs price crashed after earnings, although the long term 3C charts continued to look great, we didn't know why, but held the position so long as the long term charts held up as they are the highest probability resolution and heaviest underlying flow of funds. It turned out RIMM later (2 months or so) underwent a massive management shakeup in which the two long term dual CEOs left the company and there was a lot of management changes made, RIMM shot up well beyond our original entry which had been at a substantial loss for several months and the trade ended with a double digit gain on an equity long with no options leverage. MCP has very similar characteristics, however the recent declines of the last few days have all been the day after a "Seeking Alpha" article knocking MCP as they need financing, ironically one article put a $1.60 price tag on MCP, right near where it is today. The point being, smart money knows a lot more about MCP than Seeking Alpha, I suspect smart money knows something about a financing deal as one of their competitors recently got one, actually the day after we entered the last call position so someone knew in advance and MCP moved up in sympathy with the competitor. As such I suspect it has been largely retail selling MCP...

This is from Monday July 21st, MCP Update

"Something seems to be going on in MCP again. This is the ONLY long position I'm holding (personally) and I've considered over and over again taking it off to free up room for some trading, but I've had a feeling about it for a while, I think there is something smart money knows and I suspect it has to do with financing which is the key issue for MCP."

The point is, these charts haven't failed, they are the strongest flow of underlying trade, the highest probability resolution...

This is a 60 min leading positive divegrence and a huge one at that, the positives go through the 2 and 4 hour charts to daily and even multi-day.

So what moved MCP? Right after the close...

Molycorp (NYSE: MCP) Announces a Commitment for a $400 Million Financing Arrangement

MCP after hours...

MCP After hours up as much as +22.5%

The thing is, MCP is a part of our Most Shorted Index, at last look there were 66 million shares short, that would make for an interesting squeeze.

Being right is one thing, making money is another, lets see what happens tomorrow...