Morning Report Tuesday 8th March 2016
Good morning everyone Overview Last night Iron Ore rallied over 18% as the market digested China's statement on the weekend that they would reinforce economic growth, combined with their statement of intent to cut nonperforming assets and that this may include high cost producers. This style of panic rally is a combination of both speculation and short covering of a deeply oversold market and investors should beware as they do have a tendency to be short lived. As we have said previously, it’s amazing how market sentiment can change so radically as "Fear & Greed" kicks in. Warren Buffett's famous quote comes to mind: "We simply attempt to be fearful when others are greedy and to be greedy when others are fearful" - Warren Buffet. While Market Matters has missed the most recent spike from the resource stocks we would certainly NOT be contemplating buying at today's levels. We remind subscribers that we are not lovers of investing in the resources space as these companies cannot determine their own profitability - we regard the sector as a trading arena. Remember Market Matters has been calling Iron Ore to break over $US60/tonne over recent months and now we are here we are swaying to a neutral / bearish stance.
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