If you fire enough bullets, eventually one of them is bound to hit the bull’s eye. After spending a trillion dollars on an array of stimulus packages, the Obama administration is scrambling to “enhance” a billion-dollar program that actually hit its mark.

By now, we have all heard of the popularity of Washington’s Cash-for-Clunkers initiative. Drive, push or tow any old gas hog into a local dealer and Uncle Sam will give you a check for $3,500 or even $4,500 if you buy a new car.

In the short-term, the plan appears to be nothing but success. Car dealers actually have a reason to turn on the lights each day. Thanks to the program, inventories are no longer measured by months of supplies, but days or even hours.

For now, we are going to overlook the long-term detrimental ramifications of free money, including inflation and disruptions throughout the nation’s auto market. Prices could be brutally different in six months, even less, if the free markets still exist by then.

But, as of this writing, there is at least a semblance of capitalism in America and that means somebody is getting rich.

Is it you? It should be.

In an article yesterday, I wrote about some of the more obvious investment possibilities created by the Cash-for-Clunkers plan. Today, it is an even better, much less talked about chance to make some money.

Thanks to the weakening American dollar and Obama’s free money for new wheels, the nation’s platinum sector has had a fantastic week. Yes, platinum.

Like usual, a strong equities market weakens the greenback and increases demand for precious metals like gold, silver and platinum. The latter of the three is critical in the auto manufacturing industry as it plays a key role in exhaust gas management.

This single piece of legislation is a double-whammy for the sector.

With nearly 250,000 cars sold through Cash-for-Clunkers, savvy investors realize manufacturers are going to have to increase their production in order to replace the inventory.

That means platinum demand is on the rise.

It also means shares of companies like North American Palladium (AMEX:PAL) and Polymet Mining (AMEX:PLC) are increasing in value.

In just the last five days, shares of these miners surged by as much as 40% and 25%, respectively.

Even better, one of my favorite mining stocks – if you are a TFN Strategic Trader subscriber, it is already in your portfolio – is leading the charge.

While I am not about to anger my loyal paying customers by giving away the stock for free, I will tell you it is the month’s top performer, with gains of over 24%.

Of course, thanks to the leverage of options, our gains are significantly larger than that.

Thanks Obama!

As an American, I cannot possibly give my support for reckless subsidy spending, like Cash-for-Clunkers. It is unfair to taxpayers and the countless other individuals and companies that could benefit from similar handouts.

But as an investor, hey, you can’t beat free money. We are making plenty of that.

Source: Mining Stocks: The Surprising Cash-for-Clunker Winners

Once again, I’m drawn to palladium.

We first took a look at palladium back in May, when the metal was at $425 per ounce. It rallied as high as $475. And the two stocks I highlighted in my article scored big gains in the days that followed.

Today, palladium is tracing out a horizontal rectangle pattern, similar to what we’ve seen in gold and silver. If it breaks out of this pattern, then palladium could run as high as $525 per ounce.

Here’s the chart…

The biggest gains, however, will once again come in the shares of North American Palladium (PAL) and Stillwater Mining (SWC) – North America’s two largest palladium-mining companies.

Mining stocks are a proxy for the underlying metal. So just as gold stocks rise when gold goes up, and silver stocks rally when silver rallies, palladium stocks climb when palladium moves higher.

But the percentage gains in the stocks are usually much larger than the gains in the metals. Mining companies are sitting on large reserves of gold, silver, or palladium. So a small increase in the price of the metals creates a large windfall for the companies, and an even bigger windfall for investors.

Gold and silver started a renewed up-leg last week. Palladium looks ready to follow in their footsteps. If it does, then shares of PAL and SWC might make for a good speculative trade.

Source: These Two Precious-Metal Stocks Are Ready to Bolt Higher

Take a look at this chart…

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Palladium made an enormous run higher when it broke out above $400 an ounce back in February. As you can see, though, the chart went parabolic, gaining almost 50% in just one month. Moves like that never end well… Sure enough, the ensuing correction wiped out almost all of the gains and left investors feeling like they’d just stepped off the Giant Drop ride at a Six Flags amusement park.

Now, however, as most investors are grabbing their airsickness bags and swearing never to ride that roller coaster again, we can take a fresh look at the chart and explore the opportunity it presents…

The blue support and resistance lines are converging to form a consolidating-triangle pattern. When a chart breaks out of this pattern, the move is often quite large and usually equals the height of the triangle itself.

In the case of palladium, we’re looking at the potential for a $125 per ounce move. So we could see the metal challenge its recent highs up around $580 per ounce… or we could see it collapse down to last September’s low at $325.

Of course, we can’t know for sure which way the price of the metal is going to break, but I’m betting on the upside.

Palladium’s breakout over $400 back in February establishes solid support at that level. Odds are, if the price breaks down from the consolidating-triangle pattern, then buyers will step up, at least temporarily, at $400. So traders can take a position at current prices and keep a stop just under $400 per ounce.

The best way to play this trade is through shares of North America’s only two palladium mining companies, Stillwater Mining (SWC) and North American Palladium (PAL).

Neither of these companies is a good investment on its own merits. Management stinks. Their fundamentals are shaky. And they both seem to be plagued by bouts of periodic bad news that keeps a lid on their share prices.

But in the short term, the stocks correlate well with the price of palladium. So if the metal is ready to make a run higher, then perhaps these stocks are ready to run higher, too.

Best regards and good trading,

Jeff Clark