rederob said:
Mag etc, you are straying off topic!
But as the heading was for "2006" I reckon it's done and dusted.
Do we start a new thread, Joe Blow?
On topic:
In the last 2 months of 2006, China accounted for almost half of its annual zinc exports.
Needless to say, the flood of zinc into the marketplace has affected LME trends.
It will be very difficult for China to maintain the export trend as it was predicated on changes to the tax regime which made rapid divestment of metal more profitable than holding on inventory.
So we are now left with a zinc "overhang" that needs to work itself off.
It's early days, and only a supreme optimist would think that we will soon re-tread the rapid pace of zinc drawdowns that were the theme of most of 2006.
However, LME drawdowns of small but noticeable quantity have recently emerged. They may be indicative of a change for the better. But a waiting game is best played for now.
Here's a question for those that short the markets:
If you were to short one of the base metals, and you could only choose out of zinc, copper and nickel, which one do you pick on Monday?
Geez “crusader” rederob,
So, you don’t think that we can stray a little on these threads once in a while and have a little fun? What a sterile world we’d live in if the thought police swooped in every time a little tête-à -tête eventuated. This is unusual for you – since when did you become such a killjoy? Maybe we should rename the thread to “rederob’s corner”?
Do you really object to my reserving the right to occasionally respond to silly adverse comments, and digress with the occasional bit of banter (provided it’s not overdone)? You’ve done this yourself with Ducati – Glass houses???
Ok, back on topic (once again derailed by the peanut gallery) - Oddly enough my best shot guess currently for the XAO is a bullish drive of some kind into a top around the 24th of Feb (assuming Friday’s low holds), and suspect ZFX may blow off into a top around the 23rd Feb, if the cycle I am using is correct (could also move down into this date if the bullish pattern is not validated).
But the fly in the ointment is the Zinc chart, where the cycle is ambiguous. I am still working on this… Hence I agree with you, it is time to play a waiting game. It could be that it may try to rally but this could be a counter trend to a corrective move, and may pull back from any highs, or it is possible for it to retest the major high.
As for the other metals, I suspect Nickel may top soon. In fact, the best cycles I can see tend to indicate that Saturday may be a key time increment (hence this might be the top now), and would expect at least a small pull back ether Monday or Tuesday. If this is not a major top (the current pattern is very bullish and not the kind I like to enter short on – it is going against the trend), but may yield some sort of pull back if the cycle is correct, a high may also eventuate around 25th Feb (or could be a low).
Hence watching to see how nickel pans out. I expect it to pull back for 1-4 counter trend days, but it may actually correct from here if the pattern sets up right. A lower high (if it does move down Monday night) which fails to take out the current high may have bearish probabilities.
Of course it is too dangerous to even consider shorting an obvious bullish trend at this point, but I’m aware of the potential risk to long positions currently, hence uncommitted. If the price action confirms a bullish pattern though, and takes out the high (4 or under bearish days would be bullish, depending on how deeply the price moves), this may even try to blow off, hence this may actually be a long, and not a short – the pattern of trend will be the key.
Copper also appears to have a significant date on the 23 Feb too if my reading of the time cycles is correct. Whether this is where a major low would come in, or a counter trend high, or a higher low, I don’t know yet, and this also assumes the cycle is right, but I’m not totally happy with it at the moment. Technically Copper is still bearish in the daily chart but it may be nearing support and may counter trend bullishly; hence I don’t think I’d be short copper right now with a full position. There is an outside chance of a capitulation like the recent fall in oil, but this kind of position would be more like a lottery ticket.
In sum, just like you, I’m sitting this out to wait for a good trade… Next week will be very interesting. But if copper can’t rally up soon to take out the 11 Jan lower high, we may see a retest of the low, or even a continuation in the bearish movement. Too hard to call right now, so I’m keeping an open mind. But if oil can capitulate like it has, so can any of the metals.
Regards
Magdoran
P.S. Just out of interest rederob, are you just buying straight shares in ZFX? You’re not using warrants or options or CFDs are you? Perhaps you’re using margin? Mag