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bill frodo
manufacturing
Asked a question 2 months ago

raoul thinks copper is still going to go higher, yet marin katusa says there's plenty of supply. who's right?

Where am I?

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I can analyze /HG (copper futures) chart if you want. I just glanced at it and it's testing 50 day simple moving average (SMA) (an important level for big money) for the first time since February 2021. 

In April it got close but it technically didn't land on 50 SMA.

It's going to attract people who are trendfollowers on copper (at least from techincal analysis point of view). 

However, if this level that i mark green fails to hold, it has more room to fall and probably $4 will offer a good support (psychological level as well). 

Copper futrures (HG) daily chart 
Copper futrures (HG) daily chart 

Also with bond is moving up (= yield coming down). It is showing a bottoming reversal in daily chart. it's can put a damper on the re/inflation scenario at least for now. 

Bond is still in a down trend weekly but markets can move if bond twiches. 

US30 Year Bond Futures (ZB) daily chart. 
US30 Year Bond Futures (ZB) daily chart. 

In closing, I don't think commodities (including copper) haven't finished their run yet despite many commodities having gone nearly vertical since Q4 last year following US presidential election. 

Many smart people say that the inflation cannot keep going. I agree. But maybe in the long run. 

I don't want to underestimate this momentum that's happening in commodities and it can go on for awhile (probably well into next year) or even longer than the market is anticipating. 

So, I do think commodities is where I want to be (I have some skin in the game as I have some exposure in long gold,silver,nickel & uranium since the beinning of Q2 for positional trades that might last for several months to possibly more.) 

 

If copper can hold this level, it's a buy for me as a pilot position but I personally want a deeper pullback.

But first let's see what the Fed has to say on Jun 16 during the Fed Conference. 

I don't think they will taper, but the market can definitely move on Fed days or following them. 

Don't want to open a new position right front of a Fed's meeting. 


(Jun 17 UPDATE)

Couldn't post charts in the comment below.

So, I'm putting the charts here. 

$DXY (WEEKLY),(DAILY) --> Notice how $DXY hasn't been able to get over 50SMA (Weekly) for more than a year. If this changes, market is not going to like it much. But given its downtrend, the opposite scenario is more likely. 
$DXY (WEEKLY),(DAILY) --> Notice how $DXY hasn't been able to get over 50SMA (Weekly) for more than a year. If this changes, market is not going to like it much. But given its downtrend, the opposite scenario is more likely. 

If you're curious about the indicators used in the chart above (they're free on ThinkorSwim or possibly other charting platforms): 

1.ATR (AVERAGE TRUE RANGE):

https://www.investopedia.com/terms/a/atr.asp3

2.Directional Movement Index (DMI)

https://www.investopedia.com/terms/d/dmi.asp3

3.TTM Squeeze

https://school.stockcharts.com/doku.php?id=technical_indicators:ttm_squeeze3

4.TTM Trend (In the chart all hollow candles are up candles, and all filled candles are down candles, TTM Trend paints candles differently compared to traditional candle sticks. 

https://tlc.thinkorswim.com/center/reference/Tech-Indicators/studies-library/T-U/TTM-Trend4

DBC / DXY 
DBC / DXY 

Invesco DB Commodity Index Tracking Fund (DBC)

https://etfdb.com/etf/DBC/#etf-ticker-profile3

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