Copper Appears To Have Bottomed

Source: Michael Ballanger 07/05/2024

Michael Ballanger of GGM Advisory Inc. takes a look at the current state of copper and shares his recommendations for two stocks.

USD dollar index futures are lower by 0.43% after the jobs report came in, which is as neutral as could be imagined despite the fact that 70% of the new job creation was tied to government spending.

Gold (+0.4%), silver, oil (+0.17%), and the mighty copper (+2.88%) are all rallying with stock index futures mixed. Risk barometer Bitcoin continues to soften now down to $55,000, having broken the uptrend decisively

The Friday after a Thursday holiday is normally a continuation move of the action of the Monday-Wednesday tape. Also, the post-Independence Day period is normally a period of accelerated volatility, so relative to my thoughts on the “interesting speculation” called Tesla Inc. (TSLA:NASDAQ), and strength this morning should give me a chance to initiate a new short position.

As I indicated yesterday, it could pop a bit higher this morning, but that would mark nine consecutive “up” days and an RSI approaching 90, which, for this grizzled speculator, is enough ammo to pull the trigger.

• Amend purchase price on the TSLA August $220 puts to $5.00 instead of $6.00 posted last night.

Also, I am writing the weekend missive featuring the copper market which, as of this morning, has now corrected the excesses created by the move to $5.19/lb. absolutely beautifully. The chart shown below has every indicator (except the TRIX) firing a “Buy” signal after a 16.57% pullback off the May 20^th peak.

I exited Freeport-McMoRan Inc. (FCX:NYSE) above $52 around mid-May on the expectation that copper had to work off the 2-week overbought condition. Copper prices have now completely worked off the overbought condition with RSI once again fully neutral, but my beloved FCX could barely get down under $47 for more than the blink of an eye, which has me agonizing over the prospect of buying back in despite the fear I have that markets are long overdue for a correction.

Gold is reacting nicely to the jobs report which is certainly not hurting the FCX climate so while I am going to wait until next week to decide, be forewarned that the two metals produced by my favourite mining company look spectacular right now.

Stand by.

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Important Disclosures:

1. Michael Ballanger: I, or members of my immediate household or family, own securities of: Tesla Inc. I determined which companies would be included in this article based on my research and understanding of the sector.
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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.