Sell Signal in Iron Ore

By Murray Dawes, Saturday, 02 March 2024

The future isn’t bright for iron ore.

In today’s Fat Tail Daily, Iron ore has surprised many analysts with its strength in 2023, but a sharp fall in the past two months and softening demand means 2024 may be the year iron ore falls back to Earth.

Commodities have had a rough time over the last year, but iron ore has managed to defy the gloom.

Despite the growing dramas in the Chinese property market, iron ore demand held up remarkably well and the price started out the year at US$140 a tonne.

Chinese steel mills have seen their margins shrink to near zero or below which is often a leading indicator for soft iron ore demand and Rio Tinto’s huge Simandou iron ore mine in Guinea is expected to come into production a year earlier than expected in 2025.

The technical picture is also saying that the odds are increasing that iron ore could surprise to the downside.

As we have seen in the past with iron ore, when the music stops the price can fall rapidly.

As I show you in the video above, now that a sell signal has been confirmed, as long as the iron ore price remains below $US145 a tonne, I will remain bearish.

If China were to announce a large stimulus measure it could turn the tide and see iron ore prices spike higher again. But if they continue to disappoint the market with their intervention and the property market woes continue I think a lower iron ore price and iron ore stocks is a pretty good bet.

Check out today’s Closing Bell video above to see a detailed analysis of the iron ore chart and make sure you ‘like’ the video on YouTube if you reckon it added value to your day.

Regards,

Murray Dawes Signature

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe

0 Comments

Inline Feedbacks

View all comments

Murray Dawes is our resident expert trader and portfolio manager. He is a former Sydney Futures Exchange floor trader who went on to design custom trading systems and strategies for ultra-wealthy clients (including one of Australia’s richest families). Today, his mission is to help ordinary Aussie investors make profitable investments, while expertly managing risk.

He uses his proprietary system for his more conversative and longer-term-focused service Retirement Trader…and then applies the same system to the ultra-speculative end of the Australian market in Fat Tail Microcaps (this service is strictly limited and via invitation only).

Murray’s Premium Subscriptions

Retirement Trader

The Last Barrels
By Charlie Ormond

Australia’s fuel vulnerability just went from theoretical to very real overnight.
Returns so high you’ll lose your mind
By Nick Hubble

The best investor I know just passed away. Her astonishing returns humiliated Germany’s proudest bankers. And boy did she let them know it! But how did she do it?
Everything (might) be fine
By Lachlann Tierney

The ASX has bounced, the war drones on, and private credit lurks. Lachlann runs the Rumsfeld matrix on markets. And it turns out, we might be just fine.

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.