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Thursday, 20 June 2013

copper

First thing to admit is that I know nothing about copper per se...

However, the Chinese shibor squeeze seems to be serious, and apart from selling audusd, which I already have on, copper seems the perfect trade. Add a hawkish Fed, and a chart that reminds me of gold in the way that it's been more-or-less supported at 300 for a few years (like the 1530 level in gold) and the risk return looks promising. It's not as clear as gold, where there were massive retail positions and inflation was falling rather than rising, but the degree of consensus about Chinese growth is not dissimilar to the way people spoke about gold a few months ago. It doesn't seem a crowded trade (no-one's mentioned it to me at any rate), so I think it can have a clearout here. Target 2.50 perhaps ?

A bit more homework is needed before making it a "proper" position, but I'm shorting a little bit here. Sell HGU3.

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