AUD 69.88c. Nickel up 2.7%. multiplier effect.

Mkts sure moving around fast. On LME last night Ni closed up 2.73%. I haven't seen NY prices. This morning the AUD back above 70c (just) but that's down 2.1% in 3 days and over 3% in 7 days. To measure effect you multiply the 2 (not add) and it sure makes a difference. Same for gold which also leapt 2% last night and bit higher again on futures trading. Overall, for zero additional cost, if WSA sell a pile of Ni today it adds 5.5% to WSA bottom line. Makes a significant difference even if leaps like this are infrequent.

That's very short term. Lets look at longer time span. 3 months ago at June yr end AUD was 76.95c. Exactly a yr ago it was 88.7c. 0n 30 June 2014 it was 94.3c! How easily we forget.

So lets make a comparison with 6 months ago.
AUD was 78.72c. Ni price was USD5.95/lb. Today price is USD4.48/lb a drop of 24.3%. But AUD right now 7.40am is back under 70c at 69.88c! That's benefit of 11.3%. So net effect is today's Ni sale earns exactly 13% LESS than on 24/03/15 (6 months) for WSA.

But 6 months ago SP was $4.08. Today $2.23. That's a drop of 45.4%!! i.e. earnings have dropped 13% but SP tanked 3.49x that amount. If this isn't oversold then pleeeeze explain why.

I could go on about how new hired labour on mines has dropped 30% in 12 months, fuel has dropped, electricity cost has dropped (generated by diesel) etc etc. But just on the AUD/Ni price ratio i reckon WSA has been oversold caught among the general carnage in commodity prices.

How low will AUD go? Some say 60c. I feel 65c more likely Difference between 69.88c and 65c is 7%. If Ni stays at today's level (and who can say) a weaker AUD (and watch IOP fall out of bed over next 3 months along with LNG which is set to become our 2nd biggest export/f''k-up) then 65c quite plausible imo.

Would love to hear counter arguments re mine above.