You can't ignore the fact that all metal prices are falling hard, and before everyone yells "manipulation", you have to take into consideration that a new demand contraction might be forming.
I'm a believer in the rare earths story too, but if the market is giving us a clear signal that demand is falling for all metals, I have to listen. Look at the nickel price, it went from $25.00/lb in 2007 to $7.70/lb today. If we're supposed to see a recovery, or global economic expansion, nickel shouldn't be $7.70.
Equity options expire tomorrow. If we continue to see the share price fall next week, I'm turning my back for good. This is not the place to be.
This sounds more like "sell the rumor, buy the news" kind of a story with regard to price action. Hopefully we should enter the previous range or consolidate at these levels without further depreciation in price action.
Well, it tells you what type of demand is coming from refiners and manufacturers. The customers of rare earths are generally the same customers for base/precious metals. If nickel demand, and more importantly, if price hedging is declining (lower futures buying vs. selling), then that is giving you a pretty clear picture on where the economy may be heading.