Commodities

[blueice]

No problems, I'll get some one to read my coffee cup to tell me when the next plunge will be..................

[wren]

Said flower...."Very encouraging chart covering the whole ASX metals complex."

As forum members may know,my view of flower's Technical Interpretations is that they are often the opposite my own.

There is no doubt that today was a very good one for commodities--see the strong close on the chart (XMM--same as flower posted).But,would one say this "very encouraging"? I would say that it gives one hope,however the Index has sustained significant damage and there is still 'plenty of work to do'.

[flower]

Said flower...."So: What we want is a dropping USD, which brings about rising commodity prices in USD's.

 

Said wren..... "Just as a matter of interest, why 'can't it be much longer before that exactly happens'.

 

Replies flower.....(to wren's query)....."because of accurate Fundamental Assessment"

 

Enclosed----- the chart evidence. (will, however concede more confirmation is required)!

[flower]

London, 03 February 2010 - Metals put in a positive day yesterday, but other than for lead, the performances were not that strong and did not feel as strong as the rebound in equities. As of 5pm the metals on average were up 1.1percent, with lead skewing the data to the upside with a 3.3 percent gain. Excluding lead, the metals were up just 0.6%.

 

Considering there were some supportive undercurrents it is surprising the metals did not gather more upward momentum. The dollar was under slight pressure with the euro at 1.3960 and US pending home sales beat expectations with a gain of 1 percent, having been expected to come in up 0.4 percent. The absence of a quick return to bullishness is noteworthy and means the jury is still out as to whether this firmer tone is just a pause within the down trend of recent weeks.

 

That said, overnight the metals are up an average of 1.2 percent from last night's 5pm close and up 0.8 percent from the 7pm close, see table on right for latest prices. The Dow closed 1.1 percent higher, equities in Asia up stronger and the dollar has eased further with the euro at 1.3977 - all of which is supportive for the metals.

 

In Shanghai the May contracts are up between 2 to 3.8 percent with zinc leading the rebound followed by aluminium and then copper. Spot Changjiang copper however is up just 0.3 percent so has lost its premium to the futures.

 

After all the gyrations in LME and Shanghai prices in recent weeks, the arb window is still open with imported LME at a discount of Rmb 850, equivalent to some $125, however ahead of the Chinese New Year arb trading is likely to slow down.

 

Equities in Asia are in positive territory with the Nikkei up 0.3 percent, the Hang Seng is up 1.8 percent, the MSCI Asia Apex is up 2.1 percent and China's CSI 300 is up 2.4 percent.

 

The dollar's rise has paused with the dollar index last at 79.12, off from Monday's peak at 79.76. the euro is at 1.3960, the Australian dollar is at 0.8880, the pound is firmer at 1.6030, while the yen is also firmer at 90.40. Gold is stronger at $1,118.50 and oil has rebounded strongly to $77.80.

 

All in all the metals look well placed to rebound further and in turn that might see more bargain hunters move off the sidelines and back into the market, which could see the rallies gain momentum.

 

 

The economic calendar is fairly full today with PMI data out across Europe and the US as well as some employment data, see table on right. Late last night US vehicle sales were a disappointed with the figure coming in at 10.8 m against an expected 11.1 m.BaseMetals.com

press@basemetals.com

12 Camomile Street

[wren]

Well done flower! At last you have decided to leave TA to those who have some idea as to how it should be applied.I guess you have reviewed the results of your deeply flawed Bollinger Band system (just to refresh your memory---that's the one I backtested and proved your claimed results were pure fiction ) and decided to stick with Fundamentals.Hope it works better for you!

[flower]

[arty]

funny thing is: Metals were down again overnight.

Lead down by exactly 3.3% , copper by almost 4%.

In compensation, the AUD also dropped back below 88cUS; the net effect for Australia is as negligible as our economy in global terms.

[axeman]

Looks like Gold and Copper are taking a complete ass kicking tonight, I smell carnage on opening over here, gap central.

 

The US is going to have to get out the "big stick" if their going to stick save this at the close.

[Duster]

Hi axeman,

 

Commodities getting smashed, as will our market when it opens. Copper and oil hit hard as speculative long positions are unwound. A low interest rate environment has caused a potential bubble in the most widely held commodities - is it about to burst ?

 

Gold held up reasonably well, especially in $A terms, but the $1060 level is critical. Lets face it gold is still very profitable for many of our producers, and this level was out of the question in some peoples eyes less than a year ago, when it was $850. Generally people have short memories until they get a slap in the face. I still believe gold will perform better than other commodities and I still think there is a possibility of a short covering rally in the future. I personally would not short it.

 

Either way, I have no exposure to to commodities atm but waiting to jump on a few producers, when the time is right.

hmmmm..................... now when will that be ?

 

Duster.

[flower]

Morning Duster---what a bluddy stupid ludicrous night!!!

 

Talk about a nonsensical move---why in the name of God would anybody want to BUY the most valueless curency in the world

and DUMP the most valuable commodity----just because the screen jockeys have woken up to the fact that Sovereign Debt

in various European country now cant ever be paid back--ie they might be BROKE--BUST--thats it BANKRUPT. (are they though?)

 

Having decided that Europe is Bust, they then buy the ultimate in CRAP--the US Peso.

 

Only thing you can reassure yourself about that neither the crap or the quality will remain where they are for very long

 

so---DONT PANIC Captain Mannering!!!