Wednesday, August 31, 2011

Chart of the day is...

...copper dailies.

The red circle on that chart highlights last Friday's action and it was something we featured in IKN121, out last Sunday, with this script accompanying. We've been watching the state of copper pretty carefully recently, y'see. 

Last week we noted our concern about the “fight for four”, as copper was having all sorts of trouble in making up its mind whether the sink below $4/lb or move higher. By way of a reminder, here’s a small snippet of last week’s text:
“...the best bellweather commodity metal out there, copper, will need a close eye on it for the next couple of weeks. I’ve previously said out loud that I’m not worried about the state of play in copper as long as the metal stays $4 or over, so the last few days of struggle to hold that line is telling. There’s no rush to judgment here, but radar on copper? Yes.”
Cut to today and as we can see on the above futures chart, up to last Friday copper had traded both above and below $4/lb on every single day for 14 trading days after its significant drop in the early days of August. However Friday August 26th marked a change in direction, which also happens to be the right direction for those long Cu such as your author.
Just as last week, we’re not calling outright victory at this point and we’re not rushing to judgment. What we are doing is saying that copper looks healthier now and may turn out to be one less thing to worry come this time next week. Vamos a ver....