New York closed higher again with Financials still holding back. I think the next down leg is either here or only days away. Don’t forget what the last one was like.
I was thinking that gold might come off a bit more but beginning to have doubts that it will. But as I keep saying, I still believe there are lots of surprises to the upside in gold.
I think the Brazil stock market might have finally topped. It has had a huge rise since the middle of last year.
In my notes on Monday I made these comments on the banks -
“One point that left me encouraged – the talk of how many shorts have been opened. Who is left to sell after the last few months of bad publicity? So maybe a bad result will only be short lived. But one point that really annoys me – releasing this report after we close so that international investors get the first go at it.”
I am still really annoyed by the fact that the report was released for London trading time. Those big gaps in the charts are where international investors – not Australian – were able to take advantage of the situation so that by the time we opened, the game was really half over. Much of that trading would also have been shorts covering their positions although there was still quite a bit of scorched flesh in our time yesterday. Never have much sympathy for shorts!! As I mentioned yesterday, once the shorts have covered, I suspect the banks will continue to work their way lower. Always remember – markets are looking through the front windscreen – not the rear vision mirror.
I drew attention to the zinc price yesterday which was higher combined with the fact that stocks on the LME were very low. Today I would like to point out, that it isn’t just zinc that is in the happy position of low LME stocks but the other metals as well. Aluminium prices have picked up just recently along with stocks but that level is still close to recent lows. LME copper stocks have increased but that level is still close to historical lows. Lead stocks are really low. Nickel itself has had a good rise lately but the stocks there are very low. I have mentioned recently that I liked the chart of tin and it has moved up nicely since then. So all in all, a pretty encouraging picture on all the metals.
But then just to bring a bit of reality back into the situation - I am very concerned about the overnight weakness in the distant months in the steaming coal market. Near months holding by a thread – again.
(20min delay)
