On the yearly chart in weekly bars, notice that prices broke the almost year-long uptrend on extremely havey volume at point A. Also note that prices fell to around the 38.2% Fibonacci level.
The above charts shows more detail with daily bars.
A.) While momentum has returned
B.) Money is not flowing into the security.
Industrial metals are extremely important because they are used to make manufacturing goods. The lack of volume flowing into the market -- at least for now -- raises some concerns.
1 comment:
This is just anecdotal, but we are manufacturers in the metal industry... We manufacture all of our products in house, but there are several components that we buy for assembly purposes. Virtually everything that we buy is on backorder through June or July. At least one of the factories that we order from has gone to 4 day production scheduling and does not want to go back to 5-day production just yet, which is very frustrating for those of us who are waiting for assembly parts. We've gone to other suppliers and cleaned them out completely and now have backorders with them as well. If we had all of our assembly parts, we'd be backordered ourselves through mid-April... without assembly parts, we may not be able to fill all of our orders until June. We've talked to others who are having the same problems. However, one of my friends is the production manager for a plant that makes parts for Toyota, and they are having the opposite problem -- not enough orders!
Post a Comment