Asset prices, stocks, bonds, currencies, commodities, gold and housing all exhibit trends – short, intermediate, long and super long.
Where you are in those trends encapsulates all the current market information and thinking. But because of the different time frames people make purchase, investment and trading decisions on different information, for different reasons and with different motives – including profit motives.
It seems that iron ore’s rally might have been caught between two timeframes recently with the rally which took it to a high of $98.58, almost $10 off the recent low, reversing quickly over the last week.
Last night the Septmeber 62% Fe swap futures fell 1.25 to $93.08 tonne. That’s more than $5 off the high and more than 50% of gains given up.
But as we highlighted when iron ore broke higher earlier this month, the long-term monthly decline looks like it is still intact.
Australia’s national income and growth profile will look better if iron ore’s long term fall can be arrested.
For now though, it seems intact.