Iron Ore Chart – Update

The iron ore price will be crucial to Australia’s terms of trade over the medium term and has a big influence on how people see the outlook for  Aussie Dollar, the Australia 200 index and major resource stocks.

Given the recent sharp drop in prices, I thought this might be the time to update my March posts on the chart outlook.

Daily Chart

We are now at the bottom end of what might be a critical support zone for this chart (dashed red lines). A move below this level would represent an overlap below previous highs, making a long term bearish bias the safest interpretation of this chart it seems to me

I can’t say, I’m overly confident about the red swing counts I’ve put on this chart. However, a move below the dashed support lines suggests either a bearish scenario in which we ultimately move under the previous low or, at the least, an ongoing correction of the major rally up from “3′” to “4”.

If the current support is broken, I would then need to see a rally above the dashed black line at $133 per tonne to change my bearish bias.  That would start to look like a possible ABC correction and would take us clearly back above the 200 day moving average as well.  At this stage any rallies that fall short of $133 are more likely to be corrections against the longer term downtrend

Iron Ore 62% Fines - Tjianjin Port. Source: Bloomberg

Iron Ore 62% Fines – Tjianjin Port. Source: Bloomberg

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Commodity, Market, Trading and tagged , , , . Bookmark the permalink.

2 Responses to Iron Ore Chart – Update

  1. @JackieTheTrader says:

    Dear Ric, Thanks again for posting an IRON ORE chart. One of the reasons I appreciate it is because I don’t have access to this data (and I assume this applies to many other people too). Yet for me, the movement of the iron ore price has an important impact on a number of key Australia stocks. Regarding your labels 1-2-3-4, if they are Elliott Wave labels, I’d make the following general comment (from my experience – not from any “book”). For me, the size of the respective corrective labels 2 and 4 need to be proportional. From what I can tell, “2” pullback “2” looks to be about $20 while pullback “4” looks to be about $80. This is a factor of 4 which for me, is too big. I like to see them within 3 times each other (much 261.8%, I need additional evidence).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s