|
Well yes they are. But the more important issue is, is this THE low. Let’s look at the Materials chart and then some stocks:
Click to Enlarge
Click to Enlarge
Click to Enlarge
Click to Enlarge
Click to Enlarge
Click to Enlarge
Click to Enlarge
What we can see is that the larger miners – BHP and RIO are still some way off their bottom. And so could be the smaller miners but at the moment they do appear to have reached a resting ledge and investors will buy in again.
But we should be careful about the following prospect:
Click to Enlarge
So what happens is that buyers think it is the low – they ‘punt’ that it is the low. But the smart investors are ready to dump these stocks as the less experienced investors buy in. And that is what causes the next wave five low – a lower low.
Now it is of course possible that those that punted could be right. I acknowledge this. But they will not be right all the time. This time they could be. Time will tell.
This is the key question at the moment. Money is flowing back into equities generally and the very point I raise above is also relevant to the overall market. Punters could be right. This rally could continue for a while yet.
We can but wait and see.
Enjoy the ride
Tom Scollon |