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Copper Is On The Edge, Says BofA

Tyler Durden's picture




 

"Copper is on the edge of resuming its downtrend," is how BofA begins it brief note on the evolution of China's crucial credit-collateral commodity (as we noted earlier). Copper futures limped lower today - fading even as the exuberant stock market ripped on 330pm fundamentals today.

 

For sure, Gartman will be hoping they are wrong...

 

As BofAML notes, Copper is on the edge. 

The early April break of 3wk Bearish Wedge support says that the counter trend rally of the past several weeks has come to a conclusion and that the larger bear trend is poised to resume. HOWEVER, we need to see a closing break of the Apr-07 6577 low to confirm, until then, bears must stay patient.

 

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Mon, 04/14/2014 - 20:04 | 4658866 Uchtdorf
Uchtdorf's picture

Just keep on stacking.

Mon, 04/14/2014 - 20:32 | 4658973 flacon
flacon's picture

If copper goes down, does that mean the S&P (Chuck Schumer Fund) goes up? 

Mon, 04/14/2014 - 20:07 | 4658874 TaperProof
TaperProof's picture

Gartman, *sigh* ,  poor guy.  I feel bad for him.

Mon, 04/14/2014 - 20:42 | 4659004 pragmatic hobo
pragmatic hobo's picture

you think when gartman comes on tv to say these things he somehow does not have ulterior motive?

Mon, 04/14/2014 - 20:17 | 4658914 DirkDiggler11
DirkDiggler11's picture

Curious part is that as copper prices and eventually production decline, the main other metal also found within copper deposits is silver. So, decreasing copper production should also take additional silver supply out of the equation.

Decreasing copper production should lead to higher silver prices, but in today's fucked up PM markets, who the hell knows. I just stack on and buy a couple of boxes of ammo each week in the way home from work. When the USD gets whacked, at least I will have a plan B.

Mon, 04/14/2014 - 20:38 | 4658991 CoonT
CoonT's picture

Question: I work on construction sites and make a habit out of picking up the leftover wire bits left behind. Having accumulated somewhere in the area of 400 lbs, am I better off turning this into gold or silver now, or should I sit on it?

 

Any thought or insight would be appreciated. Thanks from one coont to another..

Mon, 04/14/2014 - 21:00 | 4659047 eddiebe
eddiebe's picture

I like nice shiny silver dollars.

Mon, 04/14/2014 - 21:02 | 4659056 Errol
Errol's picture

CoonT, I too have been accumulating scrap for years.  I would strip it while watching TV or listening to music.  Late last year I sold it when #1 copper was $2.75 and converted it into gold at about $1200.  My reasoning was that copper is going to plunge when Chinese speculators unwind their huge stockpiles of copper (used as collateral in money laundering, as documented on ZH).  I think the Chinese shadow banking unwind has just started and that we will see much more copper dumped as that trade unwinds.  Also, as China reduces all of the unproductive residential and infrastructure construction, legitimate copper consumption will decline.

Bottom line: I recommend you sell now; I already did.

Mon, 04/14/2014 - 23:10 | 4659470 Dapper Dan
Dapper Dan's picture

50 % of all copper mined goes to wire and electrical components,  recycled copper can not be used for this purpose. 

if there is to be any growth in a country it will require pure copper, from the mine..... or Chinese storage.

Dr copper is a not to be confused with Dr Pepper.

copper and Baltic index are no longer a  leading indicator.

http://www.foxbusiness.com/economy/2012/02/01/death-leading-indicator-baltic-dry-loses-luster/

Even fox gets it right now and again

 

Mon, 04/14/2014 - 20:58 | 4659044 eddiebe
eddiebe's picture

Who believes anything the banksters are saying anymore? See, materials are worth next to nothing, we should really buy more bonds and especially keep our money in BofA.        Ok, got it.

Mon, 04/14/2014 - 21:06 | 4659065 Quinvarius
Quinvarius's picture

That copper financing stuff sounds like horseshit to me.  Copper has been flat for over a year and refusing to break down.  Most commodities have started popping.  The commercial long interest in copper is massive while the spec short interest massive.  I don't see this break down happening.  It is over shorted.  I think once this story plays out, it will double like coffee did despite its "record harvests".  It is just another stupid wall street meme and everyone is already short.  Notice below readings:

http://finviz.com/futures_charts.ashx?t=HG&p=w1

I'm not making a bet either way.  But I think the short copper story is wall street nonsense. 

Mon, 04/14/2014 - 21:15 | 4659092 Magooo
Magooo's picture

How can I sign up for Gartman's newsletter?

I have this theory - read his advice - do the exact opposite - every trade will end up in the money.

 

 

Mon, 04/14/2014 - 21:25 | 4659133 Ghostdog
Ghostdog's picture

Whats amazing about gartman is that he usually gets the economics but his timing is one of the worst in history. he is as pure a fade as you can find

Mon, 04/14/2014 - 22:02 | 4659250 eddiebe
eddiebe's picture

I hate to admit, but that sounds like me.

Do NOT follow this link or you will be banned from the site!