Australian (ASX) Stock Market Forum

Zinc - The Metal for 2007

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ABARE March quarterly commodities report says zinc in deficit again this year, with further global drawdown but in balance by 2008, so a bit more upward zinc price over the next few months seems reasonable.

"Actual use" demand has to manifest - can't wait forever if you need zinc - and reveal real deficit or not, as the year progresses.
 
Zinc stockpiles are still rising and have risen the last 2 days in a row, but zinc prices are up overnight. Looks like rising prices in other metals are dragging zinc up with them.
 
dubiousinfo said:
Zinc stockpiles are still rising and have risen the last 2 days in a row, but zinc prices are up overnight. Looks like rising prices in other metals are dragging zinc up with them.
Click to expand...
Cancellations remain robust at about 15% of inventory, so drawdowns will keep the headline figure in check.
 
rederob,

Given that the forecasts are for zinc to be in deficit again this year, when do you think we might see the stockpiles start to decline again ? Do you think we will have to wait until after the european summer which starts in about 2 to 3 months ?
 
Regarding the turning of the zinc market ....
Although it is widely agreed that the supply response is coming (and soon), could this be more than offset by demand growth that has been overlooked?? (including by the IMF?)
1. High nickel prices will encourage the the move to using galvanised steels rather than stainless steel where possible
2. The continued growth in iron-ore and steel demand, particularly asian construction and vehicle markets.
3.The huge desire by Indians and Chinese (half-the worlds pop) for vehicle ownership (and plane travel) is a new phenomenon that is difficult to accurately forecast.
4. The impact of the new environmental-based laws in China to rein in the proliferation of small-mining operations could cause Chinese supply-growth to hiccup in short to medium more than anticipated.
5.Opening up trading of Zn-futures may well distribute the metal better within China. This could lead to a higher level of zinc usage and also initiate new-enterprise use of the metal.....ie, the Chinese love to make products to sell offshore and if it is very available it may be chosen for the "convenience factor"
This hypothesis is supported by China's very recent move to abolish export rebates ie, they see that the country will require all its zinc production...and maybe some significant imports as well

Thoughts??
 
Col
The "supply" response might not eventuate.
It really has not shown itself, apart from arbitrage metal dumping.
 
Disclaimer: This is posted purely for interest in technical analysis techniques, and should not be used as a basis to make financial decisions.


The previous forecast for Zinc was invalidated when a strong drive occurred towards the end of the cycle (15 April target). The recent price action finding SUPPORT at a HIGHER LOW near the 15th April may well be very bullish, and suggest a very short sharp bullish drive. (Yup, I got the long term forecast WRONG – looked good following the pattern for quite a while till it decided to rally UP, and not capitulate DOWN).

This kind of premature termination in the price action with cycles has happened before. I have been studying these in many markets and different eras for quite a while now, and have built a range of caveats for determining trading probabilities. This pattern indicates a fast move UP, usually into a key time increment and price level. In the chart below I have projected key times and prices using a standard method.

My primary thinking in probability here is a strong drive UP into the price increments I have listed on the right hand side of the chart into 21 May in a blow off kind of move. The key is for multiple higher lows, and the lows around the 15th April should not be broken (although it is possible for this to happen in an exhaustive pattern down, then a strong bullish move to eventuate, but less likely – depends on the pattern).

Typically with this kind of (McLaren) “Jamming up” move after a strong bearish counter trend to the bullish drive in the weekly chart results in a fast exhaustive bullish move up of some kind, and then a retest of the lows once a high is made usually below the major high (my primary suspicion is a retest to find support on the 20 July).

The idea is this may be a response to the struggling bearish move down which failed to obtain a capitulation style bearish exhaustion, which may yield a sudden sharp optimistic bullish move which quickly exhausts (suspect 21 May, or less likely 02 June +/- 1 trading day), retests the lows, then bases in order to resume the secular bullish drive.

This assumes the secular commodity bull will be long enough and strong enough in Zinc to sustain a retest of the high, and a subsequent bullish drive above these highs.

However I have been pioneering a multi-harmonic cycle method that I do see in evidence here, but won’t at this point muddy the water by complicating what I’m seeing (I may post another version of the chart with the harmonic time/price points for interest, but would prefer to keep this post as simple as possible).

In sum, provided the higher low holds, I can see the highest probability scenario currently of Zinc driving strongly into one of the price increments listed around 21 May. Depending on how it trades into this time point will tell a lot about how Zinc may move post this time – either a retest of the lows to find support around 20 July, or a bullish continuation into a new major high of some sort.



Regards


Magdoran


(Please note: All time points are typically +/- 1 trading day, but can be as much as 2 trading days from the time point in price action, and +/- 4 calendar days for cycle completions is not unusual).
 

Attachments

  • Zinc 18-04-07 Chart.jpg
    Zinc 18-04-07 Chart.jpg
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Magdoran said:
Disclaimer: This is posted purely for interest in technical analysis techniques, and should not be used as a basis to make financial decisions.


The previous forecast for Zinc was invalidated when a strong drive occurred towards the end of the cycle (15 April target). The recent price action finding SUPPORT at a HIGHER LOW near the 15th April may well be very bullish, and suggest a very short sharp bullish drive. (Yup, I got the long term forecast WRONG – looked good following the pattern for quite a while till it decided to rally UP, and not capitulate DOWN).

This kind of premature termination in the price action with cycles has happened before. I have been studying these in many markets and different eras for quite a while now, and have built a range of caveats for determining trading probabilities. This pattern indicates a fast move UP, usually into a key time increment and price level. In the chart below I have projected key times and prices using a standard method.

My primary thinking in probability here is a strong drive UP into the price increments I have listed on the right hand side of the chart into 21 May in a blow off kind of move. The key is for multiple higher lows, and the lows around the 15th April should not be broken (although it is possible for this to happen in an exhaustive pattern down, then a strong bullish move to eventuate, but less likely – depends on the pattern).

Typically with this kind of (McLaren) “Jamming up” move after a strong bearish counter trend to the bullish drive in the weekly chart results in a fast exhaustive bullish move up of some kind, and then a retest of the lows once a high is made usually below the major high (my primary suspicion is a retest to find support on the 20 July).

The idea is this may be a response to the struggling bearish move down which failed to obtain a capitulation style bearish exhaustion, which may yield a sudden sharp optimistic bullish move which quickly exhausts (suspect 21 May, or less likely 02 June +/- 1 trading day), retests the lows, then bases in order to resume the secular bullish drive.

This assumes the secular commodity bull will be long enough and strong enough in Zinc to sustain a retest of the high, and a subsequent bullish drive above these highs.

However I have been pioneering a multi-harmonic cycle method that I do see in evidence here, but won’t at this point muddy the water by complicating what I’m seeing (I may post another version of the chart with the harmonic time/price points for interest, but would prefer to keep this post as simple as possible).

In sum, provided the higher low holds, I can see the highest probability scenario currently of Zinc driving strongly into one of the price increments listed around 21 May. Depending on how it trades into this time point will tell a lot about how Zinc may move post this time – either a retest of the lows to find support around 20 July, or a bullish continuation into a new major high of some sort.



Regards


Magdoran


(Please note: All time points are typically +/- 1 trading day, but can be as much as 2 trading days from the time point in price action, and +/- 4 calendar days for cycle completions is not unusual).
Click to expand...

The forecast back in late December was for Zinc to undergo its largest correction since it bull began. This was at when Zinc was trading at 4500. Most fundamentalists were calling for a climb to 5500 back then. We said back then that Zinc would “see 3000-3500 before it would see 5500’.

This forecast/trade went as expected. Now is it time to put the bull hat back on?? Perhaps for the short term. The move down from the peak still counts best as an impulse until that scenario is invalidated. ATM it has not, and the current rally since the Feb low still does not have the hallmarks of an impulse yet. This may well be a countertrend(wave C of a countertrend) Wave C’s can be quite strong. Will be very interesting to see how these stack up to the probability of wave C resolution??

Cheers
 
wavepicker said:
The forecast back in late December was for Zinc to undergo its largest correction since it bull began. This was at when Zinc was trading at 4500. Most fundamentalists were calling for a climb to 5500 back then. We said back then that Zinc would “see 3000-3500 before it would see 5500’.

This forecast/trade went as expected. Now is it time to put the bull hat back on?? Perhaps for the short term. The move down from the peak still counts best as an impulse until that scenario is invalidated. ATM it has not, and the current rally since the Feb low still does not have the hallmarks of an impulse yet. This may well be a countertrend(wave C of a countertrend) Wave C’s can be quite strong. Will be very interesting to see how these stack up to the probability of wave C resolution??

Cheers
Click to expand...
I have to defer to wavepicker’s Elliott judgement here that this may well be a “C” wave up, but it would also make sense to me alternatively to see a drive up being a 3rd wave, pulling back to make a choppy wave 4, then a drive up (maybe into 6th September or 24 Oct which may be significant depending on how the pattern unfolds).

So it may be that Nick’s call was right for the drive up out of the low… Either way, I think the consensus would be bullish currently, is that correct?

Have a look at the chart attached which gives a broader context of time and price points with the harmonics included… should be interesting to watch given this is still an experimental theory I’m working on.

Regards


Magdoran

P.S. Apologies for the quality of the chart, the size limit even pipped my standard greatly resized version which usually makes it though… hence only just made it with the heaviest reduction I could set.
 

Attachments

  • Zinc 18-04-07 Chart2.jpg
    Zinc 18-04-07 Chart2.jpg
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Mag, Wavepicker,
Long time since I posted here. This is my current count - the same one I've been working with for some time. We've retraced into the 50.0% - 61.8% of the 5-waves down to -A or -1. The current move off the wave-b lows has extended 261.8x wave-i. Some low closes over the last week. My opinion is that any move now back below 3400 will see the completion of wave-2 or -B and that new lows may be around the corner.

If we do not see that break below 3400 we may now be still extending in some disjointed wave-iii of -c.

Regards



152882.png
 

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