Copper has broken below its support level and has now broken its 200-day moving average.

The problem with copper is that it tends to move so quickly that the stop has to be uncomfortably tight, and even then you don’t get much leverage. I have let the price fall a decent amount below the moving average and then shorted it. I have learned from previous attempts to short copper that you just have to jump in — no use waiting for a pullback when the market is running.

I wonder is whether I should have got into this trade earlier — have I been too cautious in waiting for a break of the 200-day moving average? On the other had, markets tend to stick to their moving averages (although copper is better-lubricated than most markets — perhaps it will slip through with ease.

Yesterday’s breakout was on quite high volume — this both tends to confirm it and makes me think that I should have moved faster. I am pleased to see that big speculators are very long of copper (light green line, bottom chart), so if this is the beginning of a big fall there could be a lot of selling to come.

The short-term chart shows approx. entry and stop positions. The moving average was at 31550.

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