On March 13th we pitched the trade to buy copper miners on the drastic pullback in spot copper prices.
Copper is oversold and so are miners who mine for the red metal. Trading Copper underlying is often something the experts can’t even do well because it is not an efficient market on the exchanges and there are one-off factors that mean day to day swings are inaccurate.
Fund flows are a lagging indicator; was this impact seen in December? The S&P 500 is seeing a decent earnings season and relief over the fiscal cliff and debt ceiling delays, giving investors places to cover shorts and buy inexpensive mega-cap valuations?
Fears of a deepening slowdown in China and uncertainty surrounding Spain’s formal request for a sovereign debt bailout has sent copper prices to their lowest level in nearly a month and half.
Euro zone headlines and fear of Greece’s exit has meant industrial metals have nearly wiped out 2012 gains after copper and the euro hit a four month low yesterday.