Big iron melts

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BHP is down marginally today as oil soars but RIO is down more solidly at 1.6% and FMG is reversing yesterday’s delight down 5%. All told markets continue to grotesquely misprice the iron ore war but I am getting the sense that RIO is under growing pressure. Perhaps after its own forthcoming good news cost-cutting story in the quarterly report we will finally see ourselves challenging the support levels in the low $50s on our way past $49 terminal support in the drive to $20. To indexes:

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The idiot spreads are now reversing. When RIO cracks the closure of this spread has so far to run that I am tempted to laugh like a mad man:

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The junior cemetery is spookily quiet today: 3

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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.