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Zinc the metal for 2006

Zinc 3M: Daily Chart – Bearish. I now have a good cycle on this that may be of interest to swing traders out there…

Key dates: 28 Feb, 12 March, 17 April, 23 May. (+/- one trading day).

Key prices for lows - 2744, 2514, 2291

While I’d love to say precisely what may happen, I can’t see this commodity clearly (yet).

I suspect a counter trend rally into either 28 Feb or March 17, then a retest of the low, possibly a new major low around 17 April and/or 23 May.

This assumes an Elliott impulse down, not an “ABC” correction. I favour an impulse at this point.

I didn’t look at the chart correctly earlier, (I have been pioneering some time/price variants, and have focussed on cycles to develop them – this obscured the obvious pattern of trend) imposing a minor correction into what I saw, not a major impulse onto the chart, hence my cycle analysis was 180 degrees out of sync.

Timing increments were right, but I got the origin point wrong… translation – this now looks like a bearish campaign to me in Zinc, with the above cycle dates as reference points for tracking the counter trends on the way down.

There may be a bit of sideways activity too – struggling bars up, and strong bars down.

However this is looking in the daily chart. In the weekly chart, this whole move down may be just a counter trend to the secular bullish campaign. Long term investors may see this as a dip in the longer term bullish campaign.

Of course I could be totally wrong about all of this, and I am still developing some radical concepts in T/A, hence this is all experimental at this point, and based on analysis of all the metal charts looking for specific patterns – this is still a work in progress.

Any analysis has its limitations, and Fundamentals that I am not aware of may have an impact I am unable to perceive. Hence, these preliminary comments should not be used as a guide to trade, but are posted for interested parties who trade technically and swing/position trade.


Regards


Magdoran
 

ZFX thread...3 Jan... post 1209..
ZFX thread...8 Jan....post 1209..
But for me just starting out in E/W I find it is not about being right as much as it is about being profitable. I enjoy your posts and find them very informative, thanks for sharing your knowledge.
 

Just reminding some guys the point I made back then that medium term fundementals lag the market Kauri.

You are very correct, being right is not important. The only exception is when you come under flak for expressing your opinion or posting a chart. I'm sure you know what I mean.

Apologies, did not see those posts in the ZFX thread, great work.
 

I looked at both techies' and foundamentalists' points of view (many from this forum) and I sold out most in Jan and the rest in Feb. Not regretting so far.
 
Hi Wave picker, congrats on being correct,

I too sold out of all my Zinc plays in Dec 2006, not because of Wave analysis or charting the Commodity but because I noticed the

- Zinc Drawdowns vs Additions balance was shifting ie finally more Zinc was coming in than going out

- I too heard China had become a Net Exporter and I firmly stick to the rule of only stay long what china is short of!


My plays since Dec have been Iron Ore, Nickel, Uranium, Oil and Gold as well (usually combined with other commodity projects)

ie HLX Gold + Iron Ore + Uranium

BYR Gold + Uranium

etc
 
My feel that the fall in zinc price was overdone. Zinc demand has actually picked up in China after the sharp fall. However metal prices at LME are currently controlled by hedge funds, with funds selling zinc call options, $3700, Mar 07, looks like they will not allow the price to rise too much before the option expiration date in Mar 07. Looking from a longer term perspective, zinc price does look cheap now.
 

Do you think Zinc will do a lead? i.e. fall big then rise bigger?

thx

MS

 

The following is really good reading (he must have a good speech writer or else maybe he really is good) "Zinc Briefing Presentation by Mr Greig Gailey" http://www.zinifex.com/UploadZinife...c Conference_6 February 2006_read version.pdf
Read, enjoy!
 
The volatility of base metal prices over the last week has been incredible. 3, 4, 5% each night, either way seems like nothing. Good luck to everyone hanging on!
 
chops_a_must said:
The volatility of base metal prices over the last week has been incredible. 3, 4, 5% each night, either way seems like nothing. Good luck to everyone hanging on!
Volatile for sure: from Bloomberg
Copper Leads a Decline in Metals in London as Stockpiles Swell By Brett Foley Feb. 8 (Bloomberg) -- Copper fell for a second consecutive day in London, leading metals including zinc and nickel lower, on speculation that rising stockpiles signal that production is now exceeding demand.

Copper stockpiles monitored by the London Metal Exchange are close to a three-year high. Banks including Barclays Capital and UBS AG about a week ago cut their price forecasts for metals such as copper. Supplies of the metal will exceed demand by about 200,000 metric tons this year, UBS said, an amount almost equal to all the stocks in warehouses monitored by the LME.

``Rising stockpiles continue to remain a negative over the market,'' said Roy Carson, a London-based trader at Triland Metals Ltd., one of 11 companies trading on the floor of the LME, the world's largest metals bourse.

Copper for delivery in three months on the LME dropped $125, or 2.3 percent, to $5,300 a ton as of 10:09 a.m. local time. That's the lowest compared with closing prices since March 2006, and 40 percent less than the record $8,800 reached in May.

Among other metals for delivery in three months on the LME, zinc fell $80, or 2.5 percent, to $3,090 a ton. The metal, used to galvanize steel, has dropped 27 percent this year, the worst performer on the exchange.

Bother!
 
the fall in the zinc spot price will only be temporary - stockpiles are still at all time lows and there is a projected increase in use of the metal - major new mines won't be coming on line for ages


if the spot price is depressed, it's being manipulated by people who have a vested interest in keeping the price artificially capped
 
Interesting article at http://www.kitco.com/ind/Dorsch/feb072007.html by By Gary Dorsch February 7, 2007 www.sirchartsalot.com Lots of intersting stuff! Includes ….. “Until January, zinc was closely tracking Chinese steel exports, as the good way to gauge Chinese demand for zinc. But the tight relationship has broken down, over the past two months, possibly a signal of global economic slowdown. On the other hand, the decline in zinc might just be a blow-off of speculative froth from hedge funds, and the market must gauge where industrials users will step in to buy the metal and provide a solid base of support”
 

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Bloody Warick Capper, he's everywhere!!!!





The LME only works a daily session compared to Kico which is a 24 Hr spot quote, hence the different % quoted.
 
Prices closed down 1.6% at $1.42/lb.
For the few bulls left out there, interesting to note that stockpiles have been drawn-down for 4 consecutive days now - off 3% in the past week.
I think the next month post-Chinese new year will definately set the tone for the next 6 months.
 
zinc stockpile drawdowns nearly 1000t a day

at this rate will be at 60,000t in a couple of months
 
Not too sure but it seems that Zinc on the LME, where the bulk of the worlds metal funds operate, is being sold down, only to recover a bit on the US exchange where the smaller punters operate???
 
rwkni1 said:
Where is zinc traded in the US? I'm pretty sure its not on Comex or Nymex....

As I said I am not too sure, as apart from Gold I don't trade metals, I only follow them in relation to mining shares... maybe someone who trades them could explain how it all works?? I also read somewhere that Shanghai will be trading Zinc futures soon???
COMEX Electronic Metals Futures Move to CME’s Globex.

 
rwkni1 said:
Where is zinc traded in the US? I'm pretty sure its not on Comex or Nymex....

Zinc is traded at London Metal Exchange. I'm a metal broker, if you open account with my employer (bank), you can trade zinc.
 
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