Archive through December 07, 2006

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cat_lady

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Post Number: 45
Registered: 10-2006

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Saturday, November 18, 2006 - 05:44 pm:

some points from an article in today's fin review:

* OPEC exports are expected to rise over the next four weeks to Dec 2
* this should set the scene for further technical selling - (that $50 might be closer than you think R2R)
* reports that hedge funds are exiting the oil market altogether (a good thing?) and rotating into equity markets on the view that weaker oil means stronger global equity markets

cat lady

Without my morning coffee I might as well be a dog

kate

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Post Number: 426
Registered: 04-2005

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Sunday, November 19, 2006 - 10:06 am:

Cat Lady, some disagreement between OPEC members about setting production targets so the price of oil can be maintained at approx US$ 60 - the "ideal price". I think some of the members have become too fond of the extra revenue.

Regards
Kate

Interesting article that I came upon whilst doing some research.
In 2000 Iraq traded oil in Euros
Iran trades oil in Euros
Russia wants(?does) to trade in Roubles.

Does anybody know of any other country not trading in US$?

http://www.peakoil.ie/newsletters/778

kate

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Wednesday, November 22, 2006 - 08:34 am:

"What's moving the markets" Platts report.

http://www.kitcometals.com/reports/platts/nov212006.html

I'm staying on the commodity sidelines for the rest of the week as much due to other commitments than anything else. I think this is a good time to gather the more recent news and maybe reassess commodity options.

Also thin trading volumes this week often add to volatility, whether this is due to the Thanksgiving long weekend or other factors, I don't know.

alby69

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Post Number: 25
Registered: 08-2005

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Wednesday, November 22, 2006 - 06:48 pm:

Kate...Zinc is the word...is the word...is the word..is the.. It's not Grease any more!!
Alby.

kate

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Post Number: 433
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Wednesday, November 22, 2006 - 08:58 pm:

Alby,
Zinc maybe the word today, but I think its time to revisit "Stairway to Heaven", Led Zeppelin's version I might add, not Rolf Harris's.

Regards
Kate

kate

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Post Number: 437
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Saturday, November 25, 2006 - 12:03 pm:

Technical update.
Nickel looks like its hitting resistance at 1550 again.
Al,Pb and especially Cu retraced well and it looks like they will give the best returns over the short to medium term. That said, if nickel breaks out, you can add it to the list.
Zinc, while it did retrace, didn't to the same extent as the others.

Last week I reduced my exposure to zinc and increased exposure to copper. I'm waiting to see the outcome of Ni before I buy Ni stocks. Bear in mind I am trading short to medium term.

tryhay

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Post Number: 407
Registered: 09-2005

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Saturday, November 25, 2006 - 09:58 pm:

Some interesting Zn notes from the LME Website which confirms:
1. Zn is at its lowest stock level since 1991
2. Analysts are looking for spot Zn to test previous highs ~ maybe even $5,400 a ton around January due to the supply shortfall,
3. .......... However we should remember that Thursday’s volume was lighter than normal and there is a danger that the returning US traders will see the better prices as a good selling opportunity. If this turns out to be the case, then it will be a good pointer to US sentiment and how they see their economy impacting the global scene.
3. Note to self top up CBH & KZL on monday morning

Details follow:
23/11/2006 13:51:05 Zinc Climbs for Fourth Day as Inventory Drops to 15-Year Low

--------------------------------------------------------------------------------

Zinc gained for a fourth straight day in London as declining stockpiles showed that production still lags behind demand.

Inventory monitored by the London Metal Exchange dropped 1.2 percent to 87,925 metric tons, the LME said today in a daily report. That's the lowest since April 1991. Consumption beat output by 167,000 tons in the nine months to September on increased demand from China, the world's largest consumer of the metal, the World Bureau of Metal Statistics said yesterday.

``Continued declines in stockpiles are positive for zinc,'' said Roy Carson, a London-based trader at Triland Metals Ltd., one of 11 companies dealing on the LME's floor. ``I'm looking for the metal to test previous highs,'' he said in an interview.

Zinc for delivery in three months on the LME rose $40, or 0.9 percent, to $4,400 a ton as of 11:40 a.m. in London. The metal has more than doubled this year, and traded at a record $4,580 on Nov. 10.

China's zinc use increased 29 percent during January to September, the Hertfordshire, England-based WBMS said. Consumers have tapped stockpiles to fill the production shortfall, and inventory has plunged 80 percent in the past year.

The declines in stockpiles have caused a supply tightness for zinc on the LME, a situation known as backwardation. The contract for immediate delivery was $82 more expensive than the benchmark- three month as of yesterday, almost double the $42 gap on Nov. 21, suggesting buyers had to pay more if they need metal urgently.

In a market with ample supplies, longer-dated contracts trade higher than nearby ones due to storage and interest costs.

Prices of zinc for immediate delivery may rise to $5,400 a ton around January due to the supply shortfall, Michael Lewis, head of commodities research at Deutsche Bank AG, said Nov. 10.

Among other LME-traded metals, copper rose $72, or 1 percent, to $6,972 a ton, nickel advanced $350, or 1.1 percent, to $31,500 and lead added $17 to $1,550. Aluminum gained $10 to $2,685 and tin advanced $35 to $9,960

Even if one does not subscribe to FA the evidence seems to be stacking up for renewed interest in Zn and other base metals as christmas approaches ~ DYOR

kate

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Post Number: 438
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Sunday, November 26, 2006 - 10:55 am:

Tryhay, I have been watching the stockpiles for all the metals. I certainly don't discount them, however I wonder exactly how transparent the information is and what other variables play a role.
If it was a a simple case of supply and demand, why did zinc go down last week and why is copper going up now?

tryhay

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Post Number: 410
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Sunday, November 26, 2006 - 04:35 pm:

hi Kate,

The market would be easy to sus if there was only one or two matters to consider. The text of the article above suggests there are multiple factors to be considered (and it is only focused on Zn and not the multitude of other sectors available) and we still will probably not understand the phenomena occurring: so we need to have a plan and work to it (sometimes slavishly).

I can not cogently explain "why did zinc go down last week and why is copper going up now", and in fact I really don't much care why (I certainly have got no control over these events), but the point is what am I going to do about it (very likely something different to what you may care to do). And the next important point is I may very well decide to do the "wrong" thing and if I do then I must correct the action ASAP.

Briefly I think of the various elements affecting the market as 'technical matters' and 'political ones' & one can develop an opinion (probably based on research) of the best approach to the current events. Yes there is the problem of 'analysis paralyses' but one has to trust one's plan and if it does fail act according to one's next step in the plan.

I'm not sure whether this helps but as posted elsewhere I'm buying into more Zn stocks on Monday DYOR

kate

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Post Number: 439
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Sunday, November 26, 2006 - 05:49 pm:

Tryhay,

I agree totally with what you say. I used to worry about why things happen but have totally given up that for the great "what is"! I think that is why I spend more time looking at the metal price charts the way I would a single share. Having said that I may be completely wrong so I have a rapid exit policy!
Zinc may well outdo copper regardless of charts but I'm going to give it a try. Good luck for the weeks trading.

Regards
Kate

rederob

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Post Number: 2092
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Sunday, November 26, 2006 - 11:58 pm:

Copper prices have risen because cancellations have increased, while Comex and Shanghai inventories have declined.
The only copper going into LME warehouses seems to be coming out of China, and that makes little sense if Shanghai stocks are dropping: Unless, of course, China's SRB is doing a bit of manipulation - which they have been prone to in recent years.
The fundamentals make good sense, and in tandem with RSI alone make the metals complex relatively easy to follow.
Buy zinc, by all means!

kate

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Post Number: 441
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Tuesday, November 28, 2006 - 07:55 pm:

Further to my comments about transparency, or lack of it.

http://www.busrep.co.za/index.php?fArticleId=3563581&fSectionId=552&fSetId=662

kate

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Post Number: 447
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Friday, December 01, 2006 - 09:31 am:

Technical update.

Nickel - After appearing to fail in its attempt to make new highs it looks as though it may going to try for a second time. If it fails it will either remain in period of consolidation or complete a head and shoulders formation. From the fundamentals, it appears that going down is the least likely scenario however it always has to be kept in the back of your mind.

Zinc - Bounced off the $2.06/lb resistance. Looks like the same scenario as Nickel( although pattern formation would be a double top)

Copper - It has stayed above its support line of $3.00/lb. Looks like its going to consolidate for a while longer.

http://www.kitcometals.com/charts/nickel_historical.html

http://www.kitcometals.com/charts/copper_historical.html

http://www.kitcometals.com/charts/zinc_historical.html

tryhay

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Post Number: 412
Registered: 09-2005

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Friday, December 01, 2006 - 10:35 am:

Thanks for the update kate.

I have also wondered about the possibility of a double top for Zn but as posted elswhere Zn did not have the strength to make a new high recently but is in the process of gathering the strength to do so IMO.

What was happening on the 17/11 (apart from an interim low?): AXA topped up their holding in ZFX. I suggest that bodes well for the short term future at least