Building Up the Land

Caterpillar, a Dow component, is up more than 6% this morning after earnings. The global machinery play is clearly tethered to global growth expectations. And you can be sure bulls are celebrating the sanguine CAT number and forecast.

Beyond a single earnings report, though, note the multi-year look at CAT, below on the monthly timeframe. The Big Cat is threatening to breach a six-year channel upside, dating back to early-2011. Holding $100 would be a decent start, but eventually bulls need to clear the $117 to make that definitive breakout play. Should that materialize, it is likely the bull case for global growth only strengthens into the summer months. 

Similar comments apply to FCX and its jump this morning, being a major copper miner also linked to global growth. 

Rotation is certainly going to be one of the key issues deciding whether the bull case for a sustained move higher on the major averages proves true, which is why we are keeping our eyes and ears peeled to long-term charts like that of CAT.