Copper has broken away from its 200-day moving average. It is hovering around the 3.00 level but doesn’t seem to regard the level as being as important as the moving average (it has crossed and re-crossed it several times). Over several days after the breakout, copper first pulled back on volume, but is now dropping on volume. I entered this morning on a low-volume pullback. I think the story here is that Eurozone fiscal retrenchment will reduce demand for Chinese goods and thus demand for copper. Copper might also respond to the weaker US leading indicators (markets respond to turning points). The break of the 200-day moving average is an important technical signal. So I have decided to go short.

I didn’t wait for a return to the top of the recent trading range because the market seemed to be making lower highs — presently it is pulling back on low volume and I hope I don’t get stopped out before we get some volume today.

Update: Closed this trade for a loss of half a risk unit — Chinese trade figures showed big copper imports last month and I fear the market could rally. I should have known this before I went in. I am still getting used to balancing macro strategy, technicals, prevailing story and newsflow. I suppose that’s why the game is hard.

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