Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Copper’s Short-Term Prospects Are Nothing But Bearish

Tuesday, March 7, 2017 4:25
% of readers think this story is Fact. Add your two cents.

(Before It's News)

From Larry Edelson: In his first address to a joint session of Congress last week, President Trump pledged to overhaul the immigration system, improve jobs and wages for Americans, deliver “massive” tax relief to corporations and to the middle class and for companies; and move forward with an Obamacare replacement.

Wow. That’s a heck of a to-do list! And it goes on …

He plans to make good on his campaign promises to rebuild our nation, and that means asking Congress for $1 trillion in infrastructure investment, guided by his “Buy American and Hire American” mantra.

The president offered little on the specifics of his plan to upgrade America’s crumbling roads, bridges and waterways, only suggesting that it should be financed through both public and private capital and create millions of new jobs in the process.

But the reality is it will be difficult to find new ways to finance such a large infrastructure package.

Now, we’re not saying that we’re against an infrastructure spending plan. Improving our roads, bridges, and waterways is certainly needed. We just don’t think our government can get a spending plan together that makes sense for all involved as quickly as the president anticipates.

But the markets clearly disagree with us.

In fact, after his speech, new life was breathed into some Trump reflation trades.

We remain wary that some of these investments — that have jumped into the stratosphere since the election — are simply moving too far, too fast. Especially, without more details.

For example, some of the moves in base metals look particularly overextended. Take copper for instance …

Copper is used in everything from building construction, power generation and transmission, electronic product manufacturing, and the production of industrial machinery and transportation vehicles. It should benefit from a massive infrastructure plan and has already seen prices move almost 15% higher since the election.

But we think the near-term party is over. As Larry’s AI chart below clearly shows, copper should make another small move higher before heading lower into earlier April.

Longer term, copper might be worth a look. But at this time, it’s best to stand aside. And this chart proves that.

All told, we think there will be a better time to buy copper and other investments that will benefit from a big infrastructure spending plan.

For now, keep your powder dry and most importantly, be patient. The opportunity to profit is coming.

The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (NYSE:JJC) was unchanged in premarket trading Tuesday. Year-to-date, JJC has gained 5.80%, versus a 6.34% rise in the benchmark S&P 500 index during the same period.

JJC currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #23 of 121 ETFs in the Commodity ETFs category.


This article is brought to you courtesy of The Edelson Wave.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)



Source: http://etfdailynews.com/2017/03/07/coppers-short-term-prospects-are-nothing-but-bearish/

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories
 

Featured

 

Top Global

 

Top Alternative

 

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.