In This Issue
Commodity prices are strong, so it is time to re-weight into the mining sector
Remember when, on 15 July, we said that it was a buyers market? Since then the market gradually, then increasingly, transitioned from the bear to the bull. It was the Sentiment Oscillator that gave the signal when it turned upwards from the low point, at which only 17% of charts were in uptrend and 58% were in downtrend. Now there are 37% of the charts in uptrend and 31% in downtrend. I suppose the buy point is always obvious, in retrospect.
Where do we go from here given the strong market since July? Has the strength been warranted? Have a look at the table below that shows improvements in commodity prices over the last 12 months. Thermal coal, iron ore and copper have been the best movers, but the others have all performed well. That means higher profits and even dividends. Stocks like BHP and RIO have delivered in the market, as have a host of other producers. The enthusiasm is flowing down into the smaller stocks now.
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