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...Copper, last week and a half that includes the pop to over $2.70/lb on the return from the China New Year holiday, plus the disappointing follow-through since then:
Here's part of what was written on copper in IKN303, out last Sunday; holding up quite well so far this week:
There was a lot of “BUY COPPER NOW!” screaming and shouting from the brokerages last week on the back of the Chinese-induced price pop, but frankly I’m still leery, was leery when I saw the move over U$2.70 and stayed leery during the Friday pullback. The reasoning is simple enough:
1) According to what we know to a decent level of confidence now, the waterfall drop in copper prices early January was run by a group of high-powered (and very well funded) Chinese financial entities.
2) I highly doubt they would have run a successful short attack in the way they did without the approval (overt or tacit, I don’t care) of the Chinese government and State.
3) Which means they’re not going to go away at the first apparent reversal, plus...
4) ...if I were a Chinese shorter of copper playing a longer and altogether more lucrative game, allowing copper to pop the way it did on the day back after Chinese New Year is exactly what I’d let the price do.
So I’m not jumping to conclusions on the back of one single price move and I’m not moving away from a wholly neutral stance on copper yet. It is, however, time to watch the copper price moves very carefully.