I just did some comparison, and Brazil probably is the problem. FCX and CEO are almost identical, but VALE dropped 10% more.
The price jumped above the MA(13) that is good. The +DI and -DI gap got a lot closer and that is good. However, -DI remains above +DI and that is very bad.
Based on what I saw at China, her economy remains very strong and there were constructions everywhere. Jobs were easy to find though pay was low. I believe that China intentionally slowed down the economy to control inflation. Her demand of IO is still there, but do not make unreasonable expectation. I do not believe VALE is going to BK, and when it recovers, I expect/demand 2X to 3X profit to justify for my risk.
Brazil is going to be problematic and you probably know more about that than I do.
The key issue is interest rate. Strong US$ is killing VALE. Lowering interest rate at US, China and Japan should help.
JMHO. Stay cool and wait for the right opportunity. There should be plenty of them.
I notice that there are a lot of attacks on McCall, and that he flip/flop his position since Sept. This is the difference between good and bad investors. You cannot and should not love a stock.
A lot has changed since Sept, in particular the strength of US$. A strong US$ is very bad for VALE since the debts are in US$. The sales are dropping and interest payments are rising. All the bad news for VALE are not in, and more bad news are coming, unless Obama increases spending to weaken US$. At this point, there is no catalyst for VALE to go up, and therefore it is a speculative stock. I am watching it tightly because I think that it can double or triple, unless it BK first. Hope this is not another Government Motor.
Basically TSMC gets 80% of the A9 contract, and SuperMor is aiming to beat INTC. However, this will happen only if the rabbits do not win the election.
During APEC, China shut down most air-polluting factories. Now that APEC is over, the smog quickly returns, and visibility at Beijing is down to 100m. That is right, every aircraft there is stealth.
The western side of China, including XinJiang and Tibet, has a lot of minority that demand independency. It is to China's benefit to suppress ISIL. The key question is why China should get involved instead of letting USA be the bad guy.
There is a discussion that RIO is a better choice than VALE. Both stocks are hit hard as the USD strengthens with no end in sight. RIO is near 52 week low. VALE is 10 years low. Therefore the reason for investment is the amount of gain. We can expect RIO reasonably go from $47 to $60 or 20% gain. VALE can easily go back to $20 and therefore a good entry point is $7. If I cannot double or triple my investment, why should I bother taking this risk now?
I thought that $10 is a strong support. I thought that $9 is a strong support. How wrong was I. I feel sorry for all the long in this slow torture to death.
I just spent a month in China touring Canton and Western China. There are construction everywhere and business is booming. Even at small city like Guiyang, there are lots of new buildings and toll highways (no freeway there). China still consumes a lot of steel. The workers are not making much, but jobs are easy to find. There are wanted ads every where.
There are talks on whether to sell VALE now, and there are sentiments like "at this juncture many of us are so far under water on VALE that it makes little sense to sell here."
A better way to make the decision is whether you would buy more VALE at current price. If you will not sink more $, then you should sell. All commodity stocks are sinking because of the strong dollar. Do you think the tide will change soon?
Other Chinese stocks such as CEO are doing just as bad. What worries me is that the recent drop may be from institutions.
I doubt very much that it will drop below $10. At the same time I like to ask those who are counting on China economy a simple question: What have you been smoking?
In a reply to one of my posts, somebody stated "China is going to continue to build out. It has lots of people and they need homes and infrastructure. China isn't about profits, it is about breaking even. They substitute growth for margins." Please allow me to explain the effects of USA economy on China.
BOBO printed $7T, that is $20K per person. If you have a spouse and 2 kids, he forced you to spend $80K. Do you have extra $80K in your pocket? USA economy should have increased $140K per person, or $560K per family if we apply a 7X multiplier. The 7X factor comes because when you spend $1 extra on grocery, the grocery employees will spend some on gas, and XOM is going to spend some on exploration etc and the GDP goes up by 7X$1. Clearly the average USA family does not receive extra $80K networth or $560K revenue. What happened?
On the day BofA received bailout, it spent $8B to buy a Chinese bank. We sent most of the $7T to China, resulting in an incredible inflation there. Small apartments in Hong Kong, Singapore, Shanghai, Beijing, Canton, Taipei all priced at $5M each. The cheapest apartment at HK is $500K for a 150 sf hole, smaller than my closet. Seniors there not owning a home cannot survive. China has such a good headache that she has to crash her economy to control the inflation.
Until the inflation is under control, there is no construction, no steel, no cement. This is why the US$ is going back to USA. Now, do you think that you can convince BOBO to stop printing funny money?
Actually it is worse than that. China Steel hadn't default because several loans were waived.
Wish I can do that. I cannot afford my mortgage, and bank forgives the money. Magically I am solvent now.
Yes, it is state owned. There is a possibility that the CEO received $ and wanted to run the company to the ground so that another Chinese steel company can buy it cheap.