Spot copper now nearing $3 even.... this is BELOW the $7000/metric ton level as mentioned by Goldman. This technically oversold condition does not appear to be ending anytime soon. What could spark some short covering here ? Only great news out of China....or Europe.
I just don't care anything about the fundamentals dealing with Commodities for many years now, none of it makes sense. Big/small inventories, bad/good weather, these markets are just too manipulated for the news. Long term trading is the easiest, just look at monthly charts for past ten years, if price is at extremes, going to reverse, just sit on your hands and wait. These markets make absolutely no sense to me, stock market making new highs recently and interest rates near zero with high debt. Now when or if the stock market crashes, one day I see the banks going to charge us to store our money instead of giving us interest. I am just staying short on all the metals. Taken partial profits on most of the metals.
Handle - the fundies always rule in the long run. Markets just remain aloof or unrealistic or irrational for a long time. Look how long it took copper to finally break down. Equities are up because Corporate profits are extremely strong. That's a fundamental. Once their profits get squeezed, look out below.
As expected , the red metal has rallied fiercely past 2 days (just after Goldman came out with a bearish analysis - a coincidence I wonder ?). Definitely some short covering, but also expectations of an improved China and European economic outlook. We are back to the 3.25 which previously was a huge support level. The old adage is that prior support once broken becomes new resistance. We shall soon see if that is true.
Goldman sees short-term rebound in copper prices By Sara Sjolin LONDON Analysts at Goldman Sachs said in a fresh note on Wednesday that they expect a rebound in copper prices over the next three months, after it underperformed other metals the past month. With expectations of accelerating Chinese growth in the second half of the year and the U.S. economy to be through its soft patch, prices should start to rebound, the analysts said. "An improvement in sentiment towards demand, with the backdrop of reasonable copper price fundamentals in the near term should see prices move higher, especially in the context of significant short positioning in the market at present," they said in a note. However, other commodities could be in for a rough ride on the short term and Goldman Sachs cut the combined commodity asset class to neutral on a three-month basis.
The rally today faded from +5 to +3 pennies. COPX (Copper Miners Index) was flat on a soaring day for equities and gold. That's ominous.
Copper now down 5 pennies despite a weak dollar which is usually constructive. Gold holding even, thus making the red metal the weakest once again. The fundies are just keeping the pressure on this guy. Until there are signs of a European rebound and China shows more growth, I don't see any upside here.
Bulls in Copper not very bullish today. Am still long term short. Wondering when it will break 3.0010?