Time to short copper
To analyse commodities, it is simply two factors: supply and demand.
In the past 3 years, commodities have become a new asset class for hedge funds, so in my view now we need to look at 2 dimension of demand: physical demand and speculative demand.
As we approached the mid year, physical demand for copper tends to cool down. Commitment of Traders report show that hedge funds had turned bearish on copper, hence speculative demand slows down. Details here. So I see this situation as an opportunity to short copper.
Shorted 1 lot Comex Copper at 361.85
Place a GTC stop at 368.00
Initial target level at 356.00
1 point represents US$250
See full report here: Metal Trading: Shorted Comex Copper at 361.85
In my previous posting, I mentioned that I had shorted 1 lot of copper at 361.85. Details here.
Price has moved in my favour today, copper is now trading at 357.00. I decide to lower my stop from $364 to $361, and maintains my target level at $354.
Place a GTC stop at US$361.00 (protect my trade from any potential loss)
Initial target level at US$354.00
Unrealised profit is US$1212.50
1 point represents US$250
Follows the smart money is the easiest way to make money from futures trading. Hedge funds have turned from net long to net short last week, I had positioned my trade according to their views.
Full report here: Metal Trading: Shorted Comex Copper at 361.85 (Review part 2)
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Hedge fund traders Reposition for Price Drop in copper
Hedge-fund managers and other large speculators reversed from a net-long position to a net-short position in New York copper futures in the week ended June 3, according to U.S. Commodity Futures Trading Commission data.
Speculative short positions, or bets prices will fall, outnumbered long positions by 887 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Last week, traders were net-long 3,661 contracts.