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Strategies & Market Trends : The Art of Investing
PICK 45.79-1.7%4:00 PM EST
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To: Sun Tzu who wrote (2018)8/19/2021 9:41:38 PM
From: Sun Tzu4 Recommendations

Recommended By
Bocor
kidl
Lou Weed
rcksinc

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I am seeing a lot of evidence that the market is pricing in an economic slowdown. This includes the drop in the interest rates *after* the Fed hinted at moving up it's tapering, simultaneously with the drop in the commodities.

I think it is more likely that we will experience one quarter of flat or negative growth. It will be enough to make some people panic and provide the rest of us with great buying opportunities.

But as is often the case in the market, there are two opposite possibilities. Commodities could be dropping in anticipation of a greater supply coming online. The stocks could be dropping in anticipation of higher rates. And the interest rates could falling simply because people are parking money there.

On his thread, Jacob concluded that there are lots of lesser iron oar producers that will come online once the price is high enough. So he sold his position in VALE in anticipation of the falling prices in 3 - 6 months. As I understand it, VALE's major product is iron oars.

If this situation unfolds, steel producers will experience margin expansion as they will have pricing power while their prices paid falls. MT is in that category.

You have to watch multiple signals to decide which scenario is more likely. If you are a trader, you may want to be short the markets for now. If you are an investor, make your shopping list. I have a lot of GTC orders waiting to be filled :)
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