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Steel index will lead the crash

any comments?



Rina Sen
Mar. 18, 2007
The steel industry and the stocks are showing signs of major
market crash. The Steel stocks have advanced a record 590 percent in the
past four years. The analytics watching the merger and acquisition data
as well the commodity moving averages manifest signs of very
substantial bubble.
The steel prices are ready to crash and take with it the steel
stocks.Steel stocks have gained 55 percent since June 2006. The supply is
far above the demand right now. As the global economies enter a period
of rapid slow down, Steel stocks can collapse by 70% in a relatively
short period of time. The best shorting opportunity is in those Steel stocks that are
debt heavy because of recent mergers and acquisitions. Mittal Steel
Co.'s $38.3 billion purchase of Arcelor SA last year was a record for
the industry. Tata Steel Ltd. of India agreed to buy the U.K.'s Corus
Group Plc for $12 billion in January. Both the companies can go
belly up because severe debt loads if steel prices collapse more than
50% in the next five years.
 Declines industrial metals and oil show the deflationary downtrend
in stock markets and economies