Kylef, if the charts had a way that one could insert fundamental changes, I would be more inclined to respect technicals. But the way I see it, AA is trading on four fundamentals... the DOW, the LME price of aluminum, the local aluminum premium, and the greed of AA's market maker.
The DOW plays a lessor part because it reflects the overall market conditions. The major drivers right now are LME aluminum prices per ton plus local premiums, minus whatever the crooked market maker steals. All three are seriously threats to the price of AA.
The Chinese are predicting a $100 dollar drop per ton in LME prices next week. Buyers will hold off purchases waiting on the price drop. This causes a small spike up in inventory and can be seen on the charts.
I'm not saying I trust the Chinese, only saying that their prediction is supposedly based on the fact that the cost of the electricity used by the smelters has recently been cut by the government supposedly to stimulate the economy. If Chinese producers pass the saving to their customers, Aluminum will indeed drop to $1400 per ton. This price will take ~$200 million off the top of AA's earnings next quarter.
The local premium is at an all time low so there is no help there.
Barkley's is the greedy bastard I've ever seen. This outfit is stealing million every day from AA traders. The SEC should be called in to stop this SOB.
Anyway, I agree with your charts... AA is headed down unless Aluminum takes a quick return to $1550 per ton.
The real question is... how low will it go? I doubt $8.62 because there are so many reasons to buy and hold until Aluminum recovers from these all time lows.
We just got to watch the DOW, the LME price per ton, and the premium and the crooked market maker. If these four come together to crash the price at the same time, then I think the worse case is $8.85.
The real worry is whether or not the Chinese government has indeed lowered the cost of electric to their aluminum smelters. I would not put it pass them. We just got to wait and see.
There is also a meeting coming up in China next week to stop the practice of selling semi-aluminum to avoid the 15% government tax. If this gets changed, the price of Aluminum will bounce up $200 per ton which will add $380 million to AA's income.
To be honest, I'm tempted to jump in at $9.01. Looking for the absolute bottom might be the wrong idea? I recall the bottom this year was ~8.73 and that was before we got a lot of good news. The bottom in 2013 was $7.70 so who really knows how low AA can sink when Aluminum, the premium, and the market maker strike all at the same time. $8.62 is not a crazy number if this happens, but I will be in deep up to eyeballs long before then.
News 
Market Data 
Discover 
AI
