Potential signal
I am a buyer of copper at $6.32 (futures price), with a stop loss at $6.15 and a target of $6.50.
The copper market has been very noisy during the trading session on Monday as we initially fell to continue the overall ugliness when it comes to anything not called the US dollar. With interest rates rising in America, the US dollar's really starting to put a lot of pressure on various assets. That being said, now we are starting to see copper try to turn things around and that does make sense as copper is definitely undersupplied at the moment and the real-world supply and demand questions when it comes to copper, especially with artificial intelligence and data centers, favors higher prices. Quite frankly, we just don't have anywhere nearly enough copper at the moment.
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Supply Constraints and Market Momentum
If we can break above the high price of the session on Monday, I'm a buyer. I think we are looking to the $6.50 level. Anything above opens up another attempt to go to the $6.75 level, and at this point in time, even if we fell from here, I would just look to buy copper at a lower level. The momentum is that strong and the fundamental picture for copper is only getting more and more bullish.
The markets will probably see some type of reaction to peace in the Middle East, but if it were to sell off for some reason, that's only going to be a nice buying opportunity as far as I can see. Quite frankly, there's not a scenario right now where I'm willing to start shorting copper as the electrification of the overall global economy will continue to be a major factor here as well, and of course the fact, like I said previously, that there just isn't enough out there to satisfy the demand. With this, I think Copper continues to be a big winner.
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