Today’s Spotlight Market
The Copper market has had a choppy few weeks of trading due to turbulent stock market activity and uncertainty in the Chinese economy. The extreme volatility in equities shook some longs out of the commodity markets. While stocks have recovered from the price shock, traders who had previously been long metals and energies have been reluctant to return to the market to this point.? The result has been erratic trading activity.
Fundamentals
Chinese manufacturing has shown signs of life, posting a 50.4 reading on HSBC?s manufacturing gauge.? The market was expecting a 50.2 reading.? While this is certainly a positive development, many Copper traders are trying not to read too far into the report.? There are still genuine demand concerns for base metals from China.? Many observers who closely monitor the Chinese economy believe that the economy there can still benefit from more central bank intervention and an injection of liquidity.?
Europe also received a bit of positive economic news, as a Purchasing Managers Index for the manufacturing industry in the euro area rose to 50.7 in October from 50.3 in September.? Some estimates for the index were sub-50, which would signal a contraction.? The US Dollar Index has also rebounded in recent sessions, which has held back metal prices.? If the index breaks 85.00 on the downside with any vigor, Copper prices could benefit greatly from the breakdown. ?
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the December Copper contract centering around the $3 level.? Initial breaches of the 3.000 mark have resulted in prices rebounding the following session, suggesting strength near the mark.? Failure to hold 3.000, especially if prices break 2.9500, could be seen as fairly bearish for Copper.? If Copper does manage to hold above 3.000, the market could see sideways trading for some time.
?
—————————————————————————————————–
Disclaimers
This article is provided for informational purposes only. No statement in this article should be construed as a recommendation to buy or sell a security or to provide investment advice. The content provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness. optionsXpress makes every effort to provide timely information to its recipients but cannot guarantee specific delivery times due to factors beyond our control. Derivatives involve substantial risk and are not appropriate for all investors. Please read the?“Disclosure Statement for Futures and Options”?prior to investing in futures or options. For investments using a straddle or strangle options strategy the potential loss is unlimited. Multi-leg option strategies are subject to multiple commissions. Profits may be eroded by the commission expended to open and close the positions and?other risks?apply.