The Miners Have This Rat: This Gnawing Rat

With earnings out of the way this morning, as one of our Members noted earlier, the major materials miner player Cleveland-Cliffs could easily squeeze into the heart of the second quarter of trading.

In addition to the rotation we have seen of late into the materials, mining, and general commodity complex, note that CLF is a rather heavily-shorted name which is surely under-owned by fund managers who have likely been infatuated with semiconductors. 

However, with the semis unwinding this week and uncertainty looming after a stellar bull run in the SMH ETF, it is well worth our time to gauge whether CLF can eventually prevail over its 200-period weekly moving average (yellow line on weekly chart, below). 

Clearly, CLF responded well to earnings. But now it must eventually conquer the 200-period weekly after gnawing at it constantly in recent months. 

We looked at the major Asia steel maker POSCO (PKX) yesterday as making progress on a multi-year timeframe. However, CLF is much more of a momentum trader favorite and almost assuredly will need to participate if miners/commodities are truly embarking on a new bull run. 

Hence, CLF versus its 200-period weekly is shaping up as one of the more prominent litmus tests this spring.