Stock markets continue to move higher with the advantage of an amazing tail wind of dollars being thrown at everything. However, there is one little bit of good news – well at least from where I sit. I have mentioned over the past couple of weeks that I was watching the base metals closely as I could see some signs of life there and I was hopeful that they could ultimately break topside out of these base patterns. Their performance overnight brings the group into focus as they were certainly looking as though stronger support has arrived.
Tie this in with continued support for iron ore as the world watches a slow implosion of our biggest competitor (but their stock market continues to go up) and we have a better picture.
There is one negative to keep in mind - the renewed strength of the Australian dollar does take a little of the cream off the top.
And before anyone points out what is probably fairly obvious – the strength of stock markets is suggesting continued demand for metals. There is an alternative view here though – perhaps as I mentioned in my notes on Monday, instead of throwing money away, it is going to be put to use in building infrastructure. On one occasion this week we were at a local shopping centre and outside was a group of young men making a general nuisance of themselves. My feeling was is this where the 1500 a fortnight is going and if it is what a horrible waste of resources.
