One long-term potential for clf and the metals group in general is a new trend for the sector based on how depressed it is.
If WS rotates out of the consumer and healthcare sectors, and it looks like this may be starting to happen, will they rotate into the metals group? All the indexes are at their highs but this group has not recovered from 2009.
CLF @ 8 year low, X @ 10 year low, RIO and VALE @ 6 year lows. Seems like a disconnect. Look at thier 20 year charts, where they've had huge spikes up from 2006-2009. Hard to say what this means for the future, but it sure would be nice to see WS re-enter the sector in teh rotation. Not sure I will stay with my CLF position after the bounce, as it doesn't look like it will last using history.
The key here is Stimulus. Japan, China, Korea, US and the Eurozone will follow. You are going to see the materials prices go up on demand and devaluing of world currencies. All of this leading to new highs across the board. It will be iron ore that will be in demand, not Pepsi.