From Dumbfax:
According to talk on some trading desks one position hedge funds might want to close out is any shorts they have in BHP Billiton.
A little over two months ago BHP Billiton was changing hands at $25, but thanks to a drop in oil, down 27 per cent in that time, and iron ore prices, down 30 per cent, plus the disaster in Brazil, the stock has fallen almost 35 per cent since then.
…Fund managers and traders often talk about not buying before they have seen what they call capitulation.
Capitulation is when it looks like stocks are so far down and out that investors are getting driven to the edge and will sell at any price they can just to get out so the pain of losing money stops.
At least this time the article appears to be tactical rather than strategic though it again contains the awful Trevor Sykes video that he will never live down. I can’t say whether BHP is going to rebound on technicals, what I can say is that I expect lower oil yet as the Fed hikes, China slows and Iran pumps and much lower iron ore as Chinese steel output appears to be on the verge a structural shift lower.
As low as the BHP share price is, it is not priced for that!
