Sell Signal in Iron Ore

Saturday, 2 March 2024

[2 min read]

Dear Reader,

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,
Editor, Retirement Trader and Fat Tail Microcaps

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).