But what about copper ?
- Thread starter syswizard
- Start date
http://blogs.marketwatch.com/thetel...an-dollar-canary-in-coal-mine-for-u-s-stocks/
Someone help me out here. Since the Aussies are net exporters of copper, and now their currency decline is making it cheaper in terms of the USD and other currencies, shouldn't this move support the red metal ?
Instead, it is down today.
Someone help me out here. Since the Aussies are net exporters of copper, and now their currency decline is making it cheaper in terms of the USD and other currencies, shouldn't this move support the red metal ?
Instead, it is down today.
Extremely interesting day for copper.
First, CME opens 7 cents down.
Then Merrill comes out with this bearish note:
http://www.marketwatch.com/story/bofa-merrill-cuts-2013-china-view-to-76-2013-05-14
Now copper has recovered to down 2 cents.
WTF ?
And this in light of a weak Euro / strong USD...and cratering precious metals.
This does not make any sense.
First, CME opens 7 cents down.
Then Merrill comes out with this bearish note:
http://www.marketwatch.com/story/bofa-merrill-cuts-2013-china-view-to-76-2013-05-14
Now copper has recovered to down 2 cents.
WTF ?
And this in light of a weak Euro / strong USD...and cratering precious metals.
This does not make any sense.
Copper Under Pressure
By Thomson Reuters - Fri 17 May 2013 07:28:08 CT
London copper edged lower to remain on course to end a three-week upward streak, undermined by a firmer dollar and indications that demand from top consumer China is unlikely to pick up strongly as Beijing shuns stimulus measures.
-------------------------------------------------------------------------------------------------------------------------------------------------------
Commentary: yet copper is up 4 cents in the July contract on the CME. This market is really getting emotional. Lots of head fakes being made.
By Thomson Reuters - Fri 17 May 2013 07:28:08 CT
London copper edged lower to remain on course to end a three-week upward streak, undermined by a firmer dollar and indications that demand from top consumer China is unlikely to pick up strongly as Beijing shuns stimulus measures.
-------------------------------------------------------------------------------------------------------------------------------------------------------
Commentary: yet copper is up 4 cents in the July contract on the CME. This market is really getting emotional. Lots of head fakes being made.
Maybe. Maybe not.
"Weak China" news is all over the place this morning, yet July copper is holding up nicely.
My gut tells me "big boys" like GS, MS, or Michael Farmer are on the long side here....holding this guy up.
Until we get more confirmation of weak asia economies (or another Euro-crisis), this is going to be a trading range affair.
$3 even remains the proverbial line-in-the-sand for the bulls IMHO.
Indeed. July contract now up 4 pennies. Sentiment may have improved due to strengthening prices of scrap steel:
http://www.cmegroup.com/education/f...-steel-futures-market-sees-trading-spike.html
No news on the LME, so who knows.....
Morning Copper Market Report
Tue 21 May 2013 07:03:58 CT
The copper market has held a large portion of its recent recovery bid, and more importantly it was sitting in proximity of its Monday highs in the early Tuesday US action. Seeing July copper holding strong in the face of weaker US equity markets, adverse currency market action and weakness in a long list of physical commodity markets is fairly impressive. The bull camp might also be encouraged that this has occurred in the face of overnight news that April Chinese refined copper in imports were down of 33% from a year ago. January through April Chinese imports were also down by 35%, yet Shanghai copper prices actually managed to rise overnight. Some in the trade suggest that copper is deriving some support from hopes of positive data later this week from the US and Chinese factory orders. It also seems as if copper is deriving some lift from favorable US sentiment data released in a prior trading session. Unlike the rest of the metals markets, copper has continued to maintain a moderate net spec short positioning, which might be reducing the threat of long liquidation.
-------------------------------------------------------------------------------------------------------------------------------------------------------
Commentary:
Would you say "hot air" is holding this market up ?
I would.
Tue 21 May 2013 07:03:58 CT
The copper market has held a large portion of its recent recovery bid, and more importantly it was sitting in proximity of its Monday highs in the early Tuesday US action. Seeing July copper holding strong in the face of weaker US equity markets, adverse currency market action and weakness in a long list of physical commodity markets is fairly impressive. The bull camp might also be encouraged that this has occurred in the face of overnight news that April Chinese refined copper in imports were down of 33% from a year ago. January through April Chinese imports were also down by 35%, yet Shanghai copper prices actually managed to rise overnight. Some in the trade suggest that copper is deriving some support from hopes of positive data later this week from the US and Chinese factory orders. It also seems as if copper is deriving some lift from favorable US sentiment data released in a prior trading session. Unlike the rest of the metals markets, copper has continued to maintain a moderate net spec short positioning, which might be reducing the threat of long liquidation.
-------------------------------------------------------------------------------------------------------------------------------------------------------
Commentary:
Would you say "hot air" is holding this market up ?
I would.
stocks generally up, resources generally down.
thinking about this disparity...
stocks are up as better times are expected, ie more borrowing & spending. Rally without masses at this point therefore expected to last longer. Majority of things people want are physical therefore involve resources.
resources down because demand weak OR/AND too much supply and too much speculative longs. Expectation of future demand & supply plays role too. Sentiment in resource circles negative.
My take is that stocks will continue up and this will (already happening?) shift sentiment for resources as sentiment improves.
This is counter argument to your copper up on hot air.
thinking about this disparity...
stocks are up as better times are expected, ie more borrowing & spending. Rally without masses at this point therefore expected to last longer. Majority of things people want are physical therefore involve resources.
resources down because demand weak OR/AND too much supply and too much speculative longs. Expectation of future demand & supply plays role too. Sentiment in resource circles negative.
My take is that stocks will continue up and this will (already happening?) shift sentiment for resources as sentiment improves.
This is counter argument to your copper up on hot air.
The hot air is the QE effect. If you believe in QE-Infinity, then shorting anything is a bad idea....as the sheer volume of liquidity lifts all "boats".
Otherwise, the moment of truth will arrive when either QE is removed or it is no longer is effective. Another possibility is that QE sparks inflation to an extent that commodities rise. I think that's what is happening right now. The current rate of inflation is dramatically understated IMHO. If this gets out of hand, the central banks will be forced to cease QE operations. Unless all countries become self-sustaining at that point in time, deflationary forces will take hold once more as they did in 2008. Then it's "look out below".
For the time-being, you are correct.