Copper : Patience

• Technically the best looking short out there, but taking a lot longer than anticipated. Patience counselled.
• Monthly and Weekly : Self explanatory. Best bear potential.
• Daily : Looks like consolidative rally to relieve oversold conditions almost over now. A close back below 260.65 would be a good first indication of bear resumption.

Chart Updates

USD/CAD

GBP/USD

Copper

EDZ6

Chart Comparison : WTI vs Copper

Appears early days yet for Copper.

Copper : Updated Charts

Monthly chart is key. Interpretation self explanatory. If price action unfolds as technical pattern indicates (=meltdown), be prepared for lots of trouble ahead (eg China woes, economic slowdown, events leading to flight to quality (USD/USTs), etc). Technical downside objective is 125/115, massive potential move. Presently the calm before the storm.

Trades Backlog

Back in Singapore today. Trades done last 2 weeks while away :=

• 23Jan15 : Sold GBP/USD @ -1.5029
• 23Jan15 : Sold ESH5 @ -2055
• 26Jan15 : Bot ESH5 @ +2036
• 26Jan15 : Sold HGH5 @ -244
• 27Jan15 : Sold GBP/USD @ -1.5158

Outstanding open positions now = 1. Short HGH5 @ -249.50 and 2. Short GBP/USD @ -1.5156

Late start to trading in Jan, after the big moves had been made. Marginal up for the month.

Internet access in China now reached hair tearing vomit inducing nose bleed levels of inconvenience. VPNs now works very intermittently, perhaps 30% of the time. Arrrrrggghhhh !!!!

Copper : Meltdown

• Enforced leave of absence for past few months to clear the decks and start all over again.
• Shorting Copper looks likely to be first trade upon restart.
• Monthly chart appears to be in meltdown mode below 290. Nothing on board as yet so I will have to try to catch any uptick to get in.
• [ Hard to get into the long USD trade at this stage ]

Copper : Update

• Recent bear squeeze in HG up to 312.45 (lead contract) took out half my short position in HGN4 (on 16Apr).
• Sufficient time elapsed and noise subsided since. Revisit.
• Monthly : Downside break of massive SHS top remains valid.
• Weekly : Downtrend intact.
• Daily : The recent rally looks like a bear flag.
• Trade : Holding on to 1RU short (poor entry). Awaiting daily bear flag break confirmation to re-establish 1 more RU short.
• Copper bears will perhaps be encouraged that this week's scaling back of Fed tightening expectations (weak +0.1% 1Q US GDP, no FOMC surprises) has not resulted in another round of short squeeze.

Copper : Same Same Still

• First attempt to re-sell Copper (at 304.10) unsuccessful, thrown off by dovish Mar FOMC minutes. Rally high of 308. Cut at 305.70 when it pulled back.
• 11-Apr : Try again, sold HGK4 @ 305.
• Today : Added on. Sold HGN4 @ 298.35 (equivalent to HGK4 at around 298.80). Total short now back to 2RU (risk units).
• Monthly : Big SHS top still valid. Neckline is broken. (Last month was first close below).
• Weekly + Daily : Price action since mid-Mar is a bear flag consolidation of the steep decline. Bear trend resumption anytime if not already under way now.

USD/JPY : Into Storm Seas

• Monthly : 5-wave upmove from 75.30 to 105.44 looks likely complete (although a further new high cannot be definitively ruled out yet).
• Weekly and Daily : Bear flag consolidation looks almost over and ready to crash. Break point on daily chart is 101.40 (closed below last night, albeit only just - not penetrated deep enough to be convincing yet).
• Compare the USD/JPY daily with the Copper weekly. If the former follows the path of the latter, expect to see a powerful downmove soon.
• Various downside targets possible. eg 93.77 previous 4th, measured bear flag objective around 96.63.
• Don't be fooled into thinking USD/JPY looks cheap. Don't go long!
• Copper, S&P500, USD/JPY all telling a consistent message. Going forward, would be a buyer of bonds on dips.

Copper : Finally ...

• Much excitement in the Copper market right now. Looks like neckline of massive 6 year SHS top is finally being put to the test.
• If one believes in Dr Copper, then a serious examination of the message from this chart is called for (eg implications for health of equity and bond markets, do I really want to be short bonds?, etc).
• Short Copper is by far the biggest risk I am running now. Overwhelms everything else so perhaps I should just square up the others and focus on managing this one big pot of a single ingredient.

Copper : Chart Update

• Updated charts with annotations.
• Monthly : Developing SHS Top theme. Bearish stance appropriate though still choppy.
• Weekly : Bear flag sell signal confirmed by this week's close.
• Daily : 2 SHS tops evident with strong downside break last night.
• Trade : Squared HGK4 at +309.50 after 2 profitable rounds. Was short at -322, targetting 298 in a period of weeks, but given that 50% of objective was achieved in a matter of hours, felt it appropriate to lock in gains first and await short re-entry. 

May Copper : Weekly Close Today Important

• Double top on weekly chart looks like it will break down today. HGK4 now trading at 317.20, below the 318.80 neckline. Already have a large short so unwilling to increase ahead of NFP later. But seems like a weak number anticipated by markets so carrying a big short Copper trade into the event is not so risky [strong NFP = tighter Fed = lower copper].
• Better still if we get a close below 315 tonight/this week.
• DT objective around 298.
• Will decide whether to add on after the numbers.

May Copper : Initiated Short @ 321.10

• Previous trades over and done with. Ctrl Alt Del. Start afresh.
• Monthly : Large SHS top.
• Weekly : Price action since 3Q13 is a bear flag.

May Copper : Taken Profit at 319.50

• Squared up my shorts from around 326.50 at 319.50.
• Sell higher (maybe around 324) AND sell break of downside supports (317.60 and 315) now.

Copper : Short HGK4 @ 324.30

• Out of long trade now. In the end, holding period turned out to be intra-day only before gratification so did not have to put up with too much discomfort for going counter-trend.
• Reinstated short position in HGK4 at 324.3.
• Full expectation of making a fresh low below 317.75.
• Not done with this yet. Will add on higher up.
• Risk for NFP : Weak number = higher HG (delayed tapering) but not sustainable if growth is weak. Risk asymmetrical then.

Copper : Long HGK4 at 319.30

• Reversed short and gone long May Copper at 319.30
• Meant to be a quick trade. Still want to be short for the bigger picture. But it has been an easy 1-way ride down from around 335 thus far and reckon we can bounce towards to SHS neckline to ease oversold conditions. 325 looks attainable without too much difficulty.
• GTC sell orders in, of course.

Copper : HGH4 Daily Chart

• 2 consecutive daily closes below neckline. Confirms SHS Top call.
• Trade parameters as marked on accompanying chart.
• Imagine the damage done to the monthly chart if this works. Potential for this to get terribly interesting.

US Rates : Short ZNH4 @ 125-06 & Short EDZ5 @ 98.93

• Long standing GTC sell orders filled today in general Risk Off environment cascaded from the weak China PMI yesterday (then Turkey, Argentina). Fresh short in ZHH4 (2.73%, 1 risk unit) and EDZ5 (1/2 risk unit).
• Same event was trigger for the Copper SHS top breakout (lower). [Risk Off = Base metal down, US rates lower]. In effect, currently my short Copper position (2 risk units) from yesterday is somewhat protected by the fresh rates positions today.
• Expect the negative price correlation (HG down, ED and ZN up) to turn positive going into FOMC next week ie US rates go back up, Copper go lower on tighter monetary policy. ie win win on both sides.
• Stops placed GTC.

Copper : Daily SHS Top, Breakout

• Increased short HGH4 position by 1 unit of risk. 
• Daily : SHS top confirmed. Neckline being broken today.
• Weekly : Top of big trading range around 340-345.
• Monthly : Large SHS top.
• [In Shanghai, blog update courtesy of VPN Express. Risk table not updated as still having difficulty accessing Google Drive here].

Copper : Short HGH4 @ 336.0

• First trade since Septaper fiasco.
• Monthly copper chart has look of a large SHS top. Current levels = pull back to NL.
• Stop out on new local high above 344.75.
• Current up move is about 50% retracement of the down leg from 344.75 to recent low of 328.85. [rally due to weaker than expected Dec13 NFP +74k (outlier?) vs E+190k].