Aluminum fell sharply on Wednesday, hit by selling funds

On Wednesday, Aluminium fell sharply. After opening higher at 1955.5, the climb was slightly turbulent, reaching a high of 1957.5. With the sell-off, aluminum prices fell rapidly, falling to a low of $1877.5, and the market closed at 1885, down $63 from the previous trading day. 200,166 lots traded throughout the day, an increase of 100,936 contracts over the previous trading day; the open interest volume was 412,682 lots, an increase of 1,727 lots over the previous trading day; the inventory volume was 539,350 tons, a decrease of 2,450 tons compared with the previous trading day. The London Metal Exchange contract fell sharply across the board on Wednesday. Among them, the 16-year high of London Copper, which has hit a 16-year high in recent days, has seen the market's fear of heights spread after a two-day decline in two consecutive trading days. Traders are generally skeptical that Len Copper will continue to rise. Some time ago, the continuous sharp decline in London Zinc has caused traders, after Wednesday's Zinc zinc plunge again, so that traders have strengthened their views on the end of the bull market in London. Under the influence of the weakening of the relevant metal contracts, the strength of the loss of Aluminium was further aggravated. On Wednesday, Aluminium received a large Yinxian line of US$70. Both volume and open interest have significantly increased in the process of decline. In particular, the transaction volume has reached 200,000 lots, which is relatively rare in the history of Lumber Aluminum. The decline in the volume of Masukura fully demonstrated that the active selling of Wednesday's aluminum was very clear, and the pattern of recent weakness in aluminum prices has already taken shape. The sharp drop in Lun Aluminum's technology on Wednesday was a precursor to a technical downswing. After Lun Aluminum hit a 10-year high on March 16 this year, there was a clear retreat. In spite of slight reversals during the period, the market is still running down the road in general. When Tuesday's aluminum rebounded to the top of the downtrend channel, it was sold off again and ended up with a medium-weight Yinxian. Aluminium's failure to break the downtrend channel made traders more pessimistic about Lon Aluminum's back-to-back situation. This forced the long line of defense to be easily defeated on Wednesday's main short selling pressure, causing a sharp drop in the price of Aluminum on Wednesday. On the other hand, since the rebound of Lon Aluminum on March 24, there has been a clear lack of strength. From the day-to-day portfolio, the right shoulder on the top of the head and shoulders is running, and Tuesday's highs and lowers indicate that the rebound on the right shoulder is over. Once the technical structure of the head and shoulders has been approved by the majority of traders in the market, it will be very unfavorable for the next trend of the aluminum price. The sharp fall of Lun Aluminum on Wednesday was the start of an accelerated decline after the end of the head and shoulders. Then, after the sharp fall of Lun Aluminum on Wednesday, how does Lum Alco operate next? The sharp fall of Lun Aluminum on Wednesday brought a lot of panic ingredients. Although the current head has been formed, it is not yet such a rapid decline, and in the process of rapid decline on Wednesday, LAU has fallen to the closing position when it fell sharply on February 25 this year. Technically speaking, it is normal to overshoot and rebound at this price. In addition, Lun Aluminum’s move since its fall on March 16 this year has been markedly different from previous declines in 2004. In 2004, Lon Aluminium was characterized by a steep rise and fall, and aluminum prices oscillated upward. The drop since March 16 this year has been a sharp drop. The aluminum price has gradually declined, and this continued decline has hit the long trader even more. Judging from the technical indicators, the current RSI has entered the overbought zone, indicating that the recent aluminum price will be oversold and rebounding. Therefore, we can initially determine that the current pattern of weak aluminum has been formed, but it will face an oversold rebound in the near future. Technical factors have dominated the recent short-term movements of Alcoa, but the gradual changes in the fundamentals have become a deeper reason for the decline of Alcoa. The recent global economic conditions are ideal. The World Bank said on April 6 that the global economic recovery has reached a peak. In the coming few years, a slight slowdown is a better forecast. The global economy has grown by 3.8% in the past year, and may increase by 3.1% this year, and this increase will continue until 2007. For developed countries, it is expected that economic growth in 2005 will slow down from 6.6% in 2004 to 5.7%. Among them, the economic growth rate of Japan in 2005 will only stay at 0.8%, which is a sharp drop from the economic growth rate of 2.6% in 2004. The economic development in the euro zone is even less optimistic. Affected by high oil prices and a strong euro, the European Commission on the 4th lowered its economic growth forecast for the euro zone this year to 2% from the previous 2% to 1.6%, down from the 2% increase in 2004. Level. Closer to the US economic indicators, the US Federal Reserve Board’s report released on the 7th showed that in February of this year, consumer credit in the United States increased at a yearly rate by 3.1%, an increase far lower than the 6.6% in the previous month. According to a report released by the US Institute of Economic Cycle (ECRI) on the 8th, the leading indicator fell to 134.7 during the week of April 1, which was lower than the previous week's revised value of 134.9. The annual growth rate of this indicator has also slipped to 3.5%, which is lower than the previous week's revised value of 3.7%. The U.S. Department of Commerce announced on April 12 that the trade deficit in February had expanded to a record high of 61.04 billion U.S. dollars, which was significantly higher than the analyst estimate of 59 billion U.S. dollars. This was also a marked improvement over the revised deficit of 58.5 billion U.S. dollars in January. The weakening of global economic prospects and the unsatisfactory U.S. economic indicators recently affected traders’ expectations for metal consumption growth, which has become a major cause of the recent weakness in the London metal market. Since the dollar’s ​​gradual appreciation since mid-March, the US dollar index has gradually increased from 81.3 at the time to 84.5. As the trend of the US dollar shows a significant negative correlation with the trend of Lon Aluminum, the continuous appreciation of the US dollar has begun to make a clear trend towards Lun Aluminum. Bad factors. Combined with the appreciation of the dollar generally lags behind the Fed's one-year interest rate hike, it is expected that the US dollar index will enter a new round of rising cycles starting from July 2005. Once the dollar enters the up cycle, it will form a long-term bearish factor for Alluminium. In terms of supply and demand, despite the fact that global aluminum still had a 10,000-ton gap between supply and demand in February 2005, it was significantly reduced from 59,000 tons in January 2005. Reflected in the inventory, LME aluminum aluminum stocks fell to 550,000 tons, the decline will be significantly reduced. Based on the above technical and fundamental analysis, it is expected that the current weak pattern of Lon Aluminum has been basically formed, and it is recommended that the bulls should take a rebound and move out in time.