Despite all the market excitement, some things never change. On Monday the Australian Bureau of Agricultural and Resource Economics (ABARE) released its September quarter commodities report.

It further strengthens our reasoning for not caring about what happens in the US. Of course, if the US does go into a steep recession it will have an impact on global markets and economies. But the influence of the US is becoming less important as time goes on.

When we take a step back and look at what is happening in Asia and the rich Arab emirates in the Middle East it becomes even more apparent that Australia does not need to be too concerned about the US Congress taking on USD$700 billion of additional debt.

Why? Because it is all still ticking along nicely in the commodities markets.

For the most part anyway. There is the odd story floating around of capital raisings being postponed due to tighter credit markets, but they appear to be in the minority.

The report from ABARE tells us that although “world economic growth is assumed to decline from 5 per cent in 2007 to around 3.9 per cent in 2008 and 3.8 per cent in 2009″ Australia’s “commodity export earnings are forecast to increase to a record $214 billion in 2008-09.”

Australian Resources Exports to Increase by 48%
That represents an increase of 40% over the previous year. Even better than that is that energy and minerals exports are forecast to increase by 48% to $178 billion.

Putting those figures into perspective, the entire value of all exports for the year until May 2008 was $216 billion.

In other words, based on forecasts (which may or may not be reliable) the resources sector alone will export this amount alone.

And what market share does the United States contribute to our exports? Last year it totaled $10.3 billion, that’s less than half of what was exported to China. And only a third of the exports to Japan.

Look to Asia for Profit Growth
Compare the economic growth rates of the major OECD economies…

… with those in Asia.

We know things can change. And we also know that many of these Asian countries rely on the US as an export market. But increasingly, the new economies in Asia are growing to an extent that is making the ‘Old World’ economies less important.

The Copper Find of the Century
Below, takes a look at Cudeco [ASX:CDU]. This is the stock that you may remember traded briefly at $10 in early 2006. At the time, the company found what it was spruiking to be the copper find of the century.

Things seem to have gone a little quieter for Cudeco since then, but now  has dusted off his Fibonacci ratios to give it the technical treatment.

Is This the Copper Stock to Take Advantage of the Copper Rebound?

Cudeco Limited (ASX:CDU) is a mining company that specialises in copper exploration and production.

The stock has been trading in a channel since November 2006, roughly between $2.5 and $5. This channel is slightly bearish as its support line goes through lower lows over the time (points A, B, C, D and E).

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Despite a false break occurred in last January (point D), market players still consider this support line as the basis of potential rebounds. This is why the stock, since it has reached this support at $2.47 on August 11, has been bouncing back.

The upside of the channel was a resistance line that was built by lower highs (points F, G, H and I). This resistance was broken in last May, which was consequently a strong bullish signal. The stock jumped then from $3.78 to $4.69, which is a 25% increase, but fell back massively in the context of global turmoil on the equity markets. Following this intraday high price of $4.69 posted on May 28 (point J), the stock declined by 47% in a bit more than two months to eventually close at $2.50 on August 8 (point E).

The stock was oversold therefore it is considered as good opportunity to buy back the stock when it reaches a support level well indentified by the market. That’s why it has quickly bounced back until $3.09 (+23.6%) in one week but declined around $2.70 in the second fortnight of August. However there is a further bullish move possible.

The technical indicators that turned bullish on the rebound generated after point E remain well oriented. They are likely to convince investors that the bearish trend occurred between May and August (between points J and E) is definitely over. The RSI bottomed in the oversold zone but curved upward and crossed above its signal line. So did the MACD which is quite conservative as it avoids short-term false signals. They still show bullish signals.

What will be the next target?

A new attempt to breakout above the first intermediary resistance is possible as the price strongly jumped yesterday. This first resistance is the 23.6% Fibonacci ratio, where the recent rebound failed on August 15 (around $3.10).

If this first target is cleared, the next Fibonacci ratios will be the next short to medium-term objectives for the price action. Those levels are $3.35 and $3.60. On a longer-term perspective, the main target would be the upside of the existing trading channel, just below $4.5.

Kagara Ltd (ASX:KZL) is a diversified mining company engaged in exploration, development and production (zinc and copper).

The stock has been experiencing a long-term bearish trend since November 2006 despite sharp up and down moves. A downtrend is characterized by lower highs and lower lows. Here the historical high price (point A) posted at $7.81 is followed by lower highs (points B, C and D).

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The downside of this bearish trend is a support line built by lower lows (points E, F, G, H and I).

There are no elements that allow us to think that this long-term bearish trend is over. However there are a lot of elements that allow us to think that the current rebound has some further development potential during the coming weeks.

First, have a global look at the chart: each time a low price is posted on this support line, a strong rebound (increase with double digits percentage) followed. A support which is tested and validated over the time gets stronger. This is the case here.

Second, the stock has been hammered during the last 2 months. It lost more than half of its value between the high posted in May (point D) and the recent low (point I). The price action bounced back a bit in last July (from point H) but it failed to retrace a significant portion of the massive decline. A new attempt is therefore expected as the stock still has been oversold but holds above the long-term support.

There is consequently a good opportunity for investors and traders to buy back the stock with a high risk/reward ratio. Indeed market players know that a breakout below the support line would quickly drive the stock further down. On one hand a stop-loss not too far below this support level is a low risk. On the other hand, as there is no major resistance near the current levels, there is a huge potential on the upside. The trade is worth it.

The MACD is slightly rising and has crossed above its signal line. This is a bullish signal.

The stock has experienced large swings and trend reversals since November 2006. A rebound that would build up some momentum could drive the price quickly higher. The next few trading sessions will give an indication about the strength of the rebound and its expected duration as the first intermediary resistance, the 23.6% Fibonacci ratio, should be reached soon.

If the price jumps above the recent small rebound, therefore above $3.6, the first target may be the 50% Fibonacci retracement level of the recent decline (between points D and I), around $4.3. Yesterday the price closed at $3.16 with an intraday high posted at $3.29. Therefore it’s a further 36% potential increase. Higher, the key level of $5.9 would become the main target on a medium-term perspective.

The Iron Boom Shifts Gears

And iron ore juniors, we reckon, may be entering a new phase. They’ve been the darlings of the market this year, mainly thanks to increases in iron prices themselves. The next round of pricing won’t be for another year.

But foreign interests have never been more interested in these stocks. Take yesterday. Russian Metalloinvest bought a hefty 20% stake in iron minnow Strike Resources (ASX:SRK). At a 39% premium to the market price. Those Europeans are so passionate.

Why would a firm thousands of kilometres away…be willing so heave so much money at so small a company…for such a big premium? Diggers and Drillers Managing Editor Dan Denning explains:

“Russian billionaire Alisher Usmanov just plunked down $100 million for a stake in Strike Resources.

“Strike has major iron ore project…in Peru. This not the first time that Usmanov has had a go at an iron ore miner in WA. He tried to sell his 19.7% stake in Mt. Gibson iron ore (ASX:MGX) to China’s Shougang, but had the transaction blocked by the Takeover’s panel.

“Do you see what’s happening here? There is one interest shared by both Russian and Chinese investors: getting rid of U.S. dollars as quickly as possible. China has nearly $1 trillion in U.S. dollar currency reserves. Russia and Japan are big dollar holders too.

“It’s the iron ore industry (in particular) and Aussie resource shares have become a kind of currency being traded by Russian and Chinese interests. We’re the new US dollar.”

Wall Street Sends All Ords Lower

But that probably has a lot to do with Wall Street’s performance last night. The Dow Jones fell 2% after regulators closed two small regional banks. The smallest ones are the first to go.

Expect more of this. It may seem like financials will never heal. They will eventually. We don’t know what the industry will look like then. Probably a lot more conservative…until the next big fad loads up balance sheets with debt until it all climaxes in another bubble.

Meanwhile, iron ore and coal stocks are still in high demand…

Felix Resources Invites Offers…a Hand Shoots Up for $3.8b

Felix Resources officially opened up for takeover bids this week. It reckons it may already have one, worth AU$3.8 billion. The market loved it.

But investors are hopeful for something bigger. The company is trading at a market cap of $3.9 billion this morning. The other coal stocks are getting attention too. Macarthur’s up 3%. Gloucester’s up 7%.