We’ve been discussing the turmoil in the financial markets for the last three weeks both literally and figuratively. We’ve discussed the massive flow of money headed into the short-term rates in, “Expected Turbulence in the Financial Markets.” We noted the rotation from industrial to precious metals in, “Re-shuffling the Metals Markets.” We’ve caught both sides of the equity market volatility between, “Equity Rally Waves a Caution Flag” and “Hidden Strength in the S&P 500.” The final piece of the confusion was addressed timely enough in, “Bottoming Action in the Euro Currency” which we wrote the night before the Dollar turned. The point of all this review is that today’s action in the copper market further reinforces the increasingly negative attitude that the commercial traders are taking towards global output. Taken in total, the signs are negative. Taken individually, they are good trading opportunities.
The copper market is frequently referred to as the, “economist of the metals markets” because the supply and demand issues associated with this market lead directly to construction and manufacturing. Therefore, commercial long hedgers actively locking in prices for their future usage is seen as a bullish sign for the economy because construction and manufacturing managers are trying to lock in their production supplies for an expected growth in demand. Obviously, commercial long hedgers setting a record net long position would be indicative of Continue reading Copper Traders Bailing Out of Record Position
The metals markets disappointed in 2014. Global growth concerns weighed on copper and platinum while silver and gold simply appeared to lose interest. There seemed to be little fear of fiat currency defaults in spite of publicly made central bank statements regarding the destruction of certain currency bases in order to spur sovereign inflation levels and stop the downward spiral of disinflation. This week, we’ll take an in depth look at the metal markets and tell you what we think the best play is in this complex.