Peter:
I read your post and just had to respond. You may have guessed that I went looking to a longer time frame for answers. Looking also for divergences. Basic commodities have been down for so long (including gold)<g> that everyone will have to pay for them in the end, not your lastest chips for that $100 toy your daughter just has to have. (Or mine for that matter). Steel makers biggest clients I would guess are the automakers.
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stockcharts.com[w,a]dacayymy[dc][pc5!c21!c50!c200!h.02,.20!f][vc60][iut!Ul14!Lc20!La12,26,9!Lh14,3!Lb14]
stockcharts.com[w,a]macayymy[d19910301,20010308][pc5!c21!c50!c200!h.02,.20!f][vc60][iut!Ul14!Lc20!La12,26,9!Lh14,3!Lb14]
stockcharts.com[w,a]macayymy[d19910301,20010308][pc5!c21!c50!c200!h.02,.20!f][vc60][iut!Ul14!Lc20!La12,26,9!Lh14,3!Lb14]
The automakers are heading down, I don't think that's a secret and they will be needing less steel. This is actually a good thing perhaps for the mills as they can decrease production and increase prices, the companies and shareholders should benefit, but the economies of steeltowns won't be helped.
Without getting into any fine detail of these charts and T.A. the first five years looks like good healthy progression, perhaps coming out of a recession, but the mass of value under the last five years of F & GM still scares the hell out of me and must come crashing down. And that bubble is still so big that the explosion may send things right from recession to depression in no time.
I hope I'm wrong and that the obvious down path of the behemoths that every pension plan around the world owns remains orderly, but orderly or quick it will still overswing and base commodities will overswing in the opposite direction.
Anyway FWIW, IMHO
regards
Bob |
