Big Iron runs hot as Banana Man piles in

Dalian is open and immediately up another 1%. Big Iron is so far taking it carefully with BHP flat, RIO up 0.9% and FMG 2%:

FMG is set up for a major break out. If it can close above $5.22 or surge intraday above $5.29. I still think the play here is short not long but I have to warn that if iron ore can get through a few more weeks without any pullback then we may not get the Q4 seasonal weakness at all. In which case, it could stay in these higher airs for another six months through the seasonally strong Q1 period and FMG will be vomiting cash throughout. I’d be setting shorts for a mid 2017 crash at this point.

Big Gas is modestly weak with oil as WPL is -0.4%, OSH flat, ORG -0.2% and STO -0.6%:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.