Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Steve Lokness who wrote (72520)	12/18/2007 4:28:26 PM
From: sea_biscuit	Read Replies (1) of 116555

You are looking for the exception and making a case for something that is just not in my world... Kinda like being able to buy frozen hamburgers at a discount and then using that to make the claim that bread, milk, and produce prices have gone down! ;-) This is what Zeal LLC said in an article in Nov this year : Coming off lows from the early 2000s the base metals have all entered into strong secular bull markets. And supported by smashingly bullish global fundamentals, the base metals technicals reveal a highly volatile yet lucrative market for speculative traders to relish. Because of the wild volatility of the base metals markets, it is awfully difficult to discern any reliable technical trading patterns. But the technicals have shown us that whether the base metals are experiencing orderly uplegs or sharp parabolic ascents, their prices are ultimately strong and resilient. Even sharp corrections to blow off speculative exuberance still leave base metals prices at historically high levels. And now five-plus years into the base metals bull markets, it is apparent that fundamentals are the key foundational drivers of today’s technical market activity. Speculators indeed contribute to daily noise and cyclical extremes along the way, but these charts prove that the global dynamics of these commodities have drastically changed. The natural resources required to grow the global infrastructure build-out are truly hot commodities. [...] Even though base metals stocks have had incredible runs thus far, the good news is the party is not over. This bull market should last for another decade or so until the current supply/demand imbalance is reversed. And the mining companies tasked with building more mines and growing supply have quite a job on their hands. [...] The bottom line is the base metals technicals show very strong secular bull markets in each of these metals. These commodities have exhibited amazing uplegs that have vaulted their prices to historic highs. As consistently-increasing global demand continues to outpace supply, these bull markets should continue for many more years. These technical charts have shown us that the base metals are very sensitive to fundamentals and because of their relatively small markets are vulnerable to wild speculative swings.

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