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Topics - Bevan

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16
Shares / Commodities
« on: February 04, 2014, 07:36:23 am »
Thermal coal prices are getting hit as possible recessions hit in emerging markets. EM countries are buyers of the marginal tonne and demand is weak, even in China who has plenty of its own thermal coal. India is not buying SA coal anymore because their Rupee is so weak. Prices yesterday rallied a little on the news that RBCT is shut due to a massive power failure but if this is fixed by Wednesday it should not affect loadings too much and prices will weaken again.

Copper has also been a great marker to watch since start of 2014 as it has predicted this sell off very well. Reasons for copper's decline include the fact that most US banks and traders are under pressure to release physical stocks onto the spot market. This has had the effect of lowering LME warehouse tonnes but increasing supply for consumers.

Iron ore prices are also weak as China is cutting back on severe over-capacity in their steel making sector. This also means that nickel and chrome prices are weak as these are feedstocks for stainless steel, ferrochrome etc.

Crude oil prices triggered a downside sell signal yesterday and we should see most crude grades moving down from here, especially as US factory orders have come in weaker and the economy might not be as strong as some have suggested.

17
Shares / USD:ZAR Updates
« on: January 09, 2014, 08:27:40 am »
I thought it might be worth having a thread for USD:ZAR updates for those investing in shares as Rand hedges. The general mood seems to be that the Rand could weaken further but is a little overcooked at the moment. This is borne out as it approaches the top bollinger in the chart below.

Short term momentum is also a little overbought (i.e. Rand oversold) for now although the trend and long term momentum support this direction. I suspect we will see 10.80 forming a ceiling (support) level for the Rand and if markets pick up from here then some short term Rand strengthening is in order. Extrapolation of the lower bollinger suggests we could see 10.30 to 10.40 forming a floor level in a few weeks time as momentum inevitably moves back down. However this will be counter to trend and downward moves will be choppy and hard to profit from.

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