Copper FuturesLong
All time high break!
Updated
In my "Copper could go to $8, $20 even" idea published on March 13th I explained I was looking to buy copper, and expected it to go up over more than a year.
I wanted to see the price consolidate over a longer time than what it did and ideally closer to all time high.
It is still possible that it will, just like gold did, after going up significantly above ATH, just like gold did.
I missed out on buying during consolidation but I FOMO'ed on the ATH breakout, I'm a bit mad because I went in with only half size; I have no problem taking bad trades with full size but when I FOMO I take smaller bets even though I keep winning, the margin restrictions do not help also to be fair, once again thank you useless regulators.
In the long term as I said in previous ideas, Copper $8 easy, even $20. If Yellen & the FED follow the example of Rudolf Havenstein copper $20,000,000 why not 😀
How does the CME limit up work when there is hyperinflation? Or strong inflation and strong price appreciation?
NOW is the time to ask this question, it's like with negative Oil prices, you had to think about it BEFORE the events, not AFTER.
Prices could get frozen. We are far from this happening, it will not happen overnight and implied volatility does not simple go from 0 to 100 overnight.
For now we keep an eye on volatility and when it starts getting extreme we look for answers. And we never go all in so even if prices get frozen all our capital won't be.
With Oil I was relieved to see the CME made an announcement that prices could go negative, days before it did. I checked before buying (I was trying to take advantage of the contango).
What happens when prices keep going up is not clear, but if and when volatility starts increasing dramatically the CME and maybe our brokers will let us know.
Remember Oil volatility increased very progressively.
The second question is in the short term, meaning the next couple of weeks or even months, where could the price be heading?
Will it just continue higher and higher or will it do a spike as it's doing now, then have a big correction around ATH?
To help answer this question we can look at other commodities, first gold.
But copper is not gold, it is an industrial metal, used for real, no one is accumulating copper as a store of value.
So next let's take a look at lumber which everyone knows has been going and going and going.
Lumber: retest, but only after going ridiculously high. I copper did this... I'd be happy.
We can look at a couple more examples, the price action is repetitive.
And what best to compare to copper than copper itself?
The price before the 2005-2008 copper bull run was choppy, and it stayed choppy for a while after going past all time high.
It's logical and obvious. Participants do not magically go from uncertain to mega bullish overnight, and the public (nobs) do not simply all "hear about copper" AND buy overnight.
Everyone I think knows about Bitcoin, most of the public heard about it progressively over september-december 2017, mostly the last 2 months.
Some day someone might have heard from a colleague "hey have you heard about this Bitcoin thing?", it's progressive not instantaneous.
And then the public, "mainstreet", joined Bitcoin from late 2017 to early 2019, so over a 1 and a half year period.
The price of copper was vertical before passing all time high. So I expect it to continue on the same trajectory. Simple. Just like Lumber last year.
It's funny to compare copper and lumber, when Lumber past ATH in 2020 it did a doji on the daily chart, with the body in the middle, and copper just had the exact same candle on ATH last week on the 4 hour chart.
Lumber is a MACHINE which has been offering the rich a crazy risk to reward.
Most of us are poor plebes that cannot afford to buy a full lot of lumber (worth 100K-200K you have to multiply the price by 110) with a risk of $10,000 and potentially much more on a gap. Plus most retail brokers do not even offer lumber.
But we can buy copper mini or even micro lots. Which brings us to the third question. Where to buy?
We already started to answer this question and looked at some examples.
In reality I see only 2 ways to buy (be it spot or a call):
- On a retest of ATH
- FOMO, for example on a 1 hour red candle
There is nothing in between for me, if the price reverses then I would expect it to go all the way down to ATH (implied volatility, support and all).
Considering how the price has been behaving I'd expect something similar to lumber daily chart but on the 4 hour chart.
I would buy any inside bar for example. Possibly even any 1 hour red candle. And as it goes up keep buying more.
I wanted to see the price consolidate over a longer time than what it did and ideally closer to all time high.
It is still possible that it will, just like gold did, after going up significantly above ATH, just like gold did.
I missed out on buying during consolidation but I FOMO'ed on the ATH breakout, I'm a bit mad because I went in with only half size; I have no problem taking bad trades with full size but when I FOMO I take smaller bets even though I keep winning, the margin restrictions do not help also to be fair, once again thank you useless regulators.
In the long term as I said in previous ideas, Copper $8 easy, even $20. If Yellen & the FED follow the example of Rudolf Havenstein copper $20,000,000 why not 😀
How does the CME limit up work when there is hyperinflation? Or strong inflation and strong price appreciation?
NOW is the time to ask this question, it's like with negative Oil prices, you had to think about it BEFORE the events, not AFTER.
Prices could get frozen. We are far from this happening, it will not happen overnight and implied volatility does not simple go from 0 to 100 overnight.
For now we keep an eye on volatility and when it starts getting extreme we look for answers. And we never go all in so even if prices get frozen all our capital won't be.
With Oil I was relieved to see the CME made an announcement that prices could go negative, days before it did. I checked before buying (I was trying to take advantage of the contango).
What happens when prices keep going up is not clear, but if and when volatility starts increasing dramatically the CME and maybe our brokers will let us know.
Remember Oil volatility increased very progressively.
The second question is in the short term, meaning the next couple of weeks or even months, where could the price be heading?
Will it just continue higher and higher or will it do a spike as it's doing now, then have a big correction around ATH?
To help answer this question we can look at other commodities, first gold.
But copper is not gold, it is an industrial metal, used for real, no one is accumulating copper as a store of value.
So next let's take a look at lumber which everyone knows has been going and going and going.
Lumber: retest, but only after going ridiculously high. I copper did this... I'd be happy.
We can look at a couple more examples, the price action is repetitive.
And what best to compare to copper than copper itself?
The price before the 2005-2008 copper bull run was choppy, and it stayed choppy for a while after going past all time high.
It's logical and obvious. Participants do not magically go from uncertain to mega bullish overnight, and the public (nobs) do not simply all "hear about copper" AND buy overnight.
Everyone I think knows about Bitcoin, most of the public heard about it progressively over september-december 2017, mostly the last 2 months.
Some day someone might have heard from a colleague "hey have you heard about this Bitcoin thing?", it's progressive not instantaneous.
And then the public, "mainstreet", joined Bitcoin from late 2017 to early 2019, so over a 1 and a half year period.
The price of copper was vertical before passing all time high. So I expect it to continue on the same trajectory. Simple. Just like Lumber last year.
It's funny to compare copper and lumber, when Lumber past ATH in 2020 it did a doji on the daily chart, with the body in the middle, and copper just had the exact same candle on ATH last week on the 4 hour chart.
Lumber is a MACHINE which has been offering the rich a crazy risk to reward.
Most of us are poor plebes that cannot afford to buy a full lot of lumber (worth 100K-200K you have to multiply the price by 110) with a risk of $10,000 and potentially much more on a gap. Plus most retail brokers do not even offer lumber.
But we can buy copper mini or even micro lots. Which brings us to the third question. Where to buy?
We already started to answer this question and looked at some examples.
In reality I see only 2 ways to buy (be it spot or a call):
- On a retest of ATH
- FOMO, for example on a 1 hour red candle
There is nothing in between for me, if the price reverses then I would expect it to go all the way down to ATH (implied volatility, support and all).
Considering how the price has been behaving I'd expect something similar to lumber daily chart but on the 4 hour chart.
I would buy any inside bar for example. Possibly even any 1 hour red candle. And as it goes up keep buying more.
Trade active
Trade active
New trade, might make a new high. TGT $5 at first.
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