Here’s why my head is at:
- Momentum trading: The sharp rise in copper prices could attract momentum traders looking to ride the upward trend. But we need to be cautious of potential pullbacks as the market digests the news.
- Volatility plays: With increased uncertainty, options strategies might be more attractive for those looking to profit from price swings without taking on excessive directional risk.
- Spread trading: The widening Comex-LME spread, which hit a record high of $753/mt, maybe offers opportunities for arbitrage or spread trading strategies.
- Short-term overbought conditions: With copper prices reaching new highs, we traders should be alert for posible short-term overbought conditions that could lead to quick pullbacks.
- Sector rotation: The focus on copper might lead to rotation within the wider metals sector. Should we look for opportunities in related metals or mining stocks that might benefit from spillover effects?
