So far this week, copper has sold off to levels not seen since early October in the March 2018 contract. Technically, levels at 3.051 and the psychologically significant 3.00 level have been breached as well as a trend line originating from the June 21st low.
Fundamentally, after reading yesterday’s RJO Market Insights, one may have noted “the surprise 10,125 ton inflow into LME warehouses” as well as “news of a restart in talks between unions and the mining company in Peru”.
What may be most interesting to consider regarding the copper market and other commodities such as lumber, which was limit down yesterday, are their implications to the housing market and broader economy as a whole. To many, bearish trading in copper and lumber does not bode well for housing and the broader economy given their use as construction materials, thereby gauging demand and growth.
Also, for those who monitor politics, you may consider the recent implications of the tax bill in congress and the market discounting its passage as an opportunity to position in this market and others.
For those who would like to discuss these developments in the markets and others, please contact me at your convenience.
Copper Mar ’18 Daily Chart