As I watch tonight the Shanghai Comp take out the 2500 level with a 4.27% drop, falling to a level that was not seen since April 2009. I just have to sit and marvel how many other factors that are all coming together as we move to test and maybe taking out our recent lows in many of the markets around the world. This could possibly happen today, including SPX’s 1050ish recent low as SPX futures is coming close to that range tonight.
Here are just a few things help it all, Spot Price in Iron Ore out of China and India are breaking below 140/tone after China Government announced that are removing the Export rebate this week causing the steel mills to have a decreased interest in purchasing the ore. At the same time Rio Tinto Group in an interview at the Fortune Global Forum in Cape Town said that “If the spot price drops below quarterly pricing and the steel mills basically force us to sell at that lower spot price that will probably be the end of quarterly pricing.” Tomorrow should reflect even a clear break from that level to the downside.
Copper Prices on the Comex Futures, yesterday tested it’s 50MA on the daily as resistance and falling under it tonight appears that a 200MA/50MA cross should be coming tomorrow or the following day on that chart.
10 year Bond dropping under 3.00%, not seen since May 2009 tonight
Tonight, The Conference Board reporting that the leading economic index for China had the smallest gain in five months in April, revising down its gauge for the economy’s outlook. We also have Thursday night the Global Purchasing Managers Indexes for June coming out including China which will probably follow along with this indicating a global slowdown. Plus, we will be starting our next earnings quarter that has India Monsoons, China Flooding Hurricanes and European Vacation time slow down to deal with.
Everyone knows about the Oil Spill and Baltic Dry Index problems…which continues. Plus, as everyone knows I declared AAPL topped last Monday, (article below) .
Gold also hitting a 52 week high.
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Eur/USD is getting back to that all time 50% retrace level of 1.2134. ..Yes there is a lot of support at 1.2200 but we could be seeing it soon.
Just sort of amazed by it all. I could go on with so many other things I am seeing, but maybe I should just sit here and think about all the stupid analyst upgrades over the last few weeks, which is probably the best indication that April 2010 was our top, stupid analyst.
It could be an interesting day tomorrow.
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Nymph, your breadth of knowledge is amazing.
Nymph, first, thanks, always a pleasure to read. Second, the “stupid analysts” you refer to seem to be a perfect contrarian indicator. You should definitely consider including it in your list “to watch for next week”. And third, as an observation from the sidelines, as I deal with long-term infrastructure kind of business in my daily life, this slowdown in copper is not surprising. Personally I am bearish on big engineering groups. It’s not that the customers don’t buy from them because they (the customers) don’t have money. They don’t buy because they don’t see increase in their customers’ spending. And to cope with that the engineering groups will have to reduce prices. Sort of adds to Fly’s deflationary thesis…
Sandgator and Kreizi…Thank you for your comments, made me SUPER happy to read. Kreizi, you are so right about looking around in the outside world. For Fly’s Deflation….that is like a big huh and it really doesn’t need to be called a thesis…..there is no demand and a huge surplus of everything…it is going to just take time to work it all out, imho 2009 Global Spending, esp Chinas just messed up everything more. I worry about calling it deflation because then people will assume that T Bonds will be strong and bottomline, we have too much supply of that too so it could be the Black Swan that will really confuse the heck out of economist later on…maybe they will have to come up with a new name for it, ouch..
Hi “oh china gir”l 🙂 — what are you thoughts on this article and MS’s eventual bullish view on China- thanks!
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aTiieb8v6AVE&pos=1
Oct 2008 started recoverying when China Govt came in and started buying Copper for strag reserves. If China Govt comes in and buys again or decides to flood world with money then I would get bullish…but at this point Shanghai is in a death cross w a HUGE bubble that still needs to work out….lol, now I have that song in my head….lol.