from Dan Norcini:
Copper had its single largest daily gain in over a year and a half in today’s session coming on the heels of the payrolls number. That, combined with stock drawdowns in both Shanghai and in the LME warehouses, sent shorts scrambling for cover. Once their buying tripped some key technical levels, the algorithms took over and bought everything in sight. The result – a gain of nearly 7% in a single day.
Drawdowns in copper stocks are notoriously unreliable signals however as some less-than-scrupulous players have in the past, simply bought copper, moved it out of the official warehouses and stuck it elsewhere all to give the idea that demand is robust. That allowed them to play the market from the long side claiming that supply was insufficient for current levels of demand.
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