Malcolm Bucholtz B.Sc, MBA Analyst

Trading Note

2007 started out on a euphoric note for Uranium companies, but the euphoria soon changed to anguish as Uranium prices corrected hard to the downside. Investors were left feeling angered and slighted at the nasty turn of events.

But, at the Market Traders, we have been pointing out to investors that this correction has been seen before in other commodities, namely Oil and Natural Gas. The fact that it has now occurred too in Uranium, is not unexpected. Commodities after all are cyclical entities and can sometimes get too far ahead of themselves due to speculative excess. As the following chart shows, in 2006 Crude Oil took a nasty 37% decline. No doubt at the time, many investors in oil related equities were left feeling bruised.