Copper has under performed equities for over a year. However, it remains highly correlated with equities and the rest of the “risk-on” asset class. Copper is a great contract for intraday traders because of the “bang for buck”. It is mind-boggling that so many day traders remain married to trading the S&P mini (ES) all day long to the exclusion of a myriad of other contracts that are better “traders” in the intaday space. If mind-numbing 3 handle ranges for hours on end are your cup of tea by all means stick with the ES all day. If not, step out and take a look at other contracts. We daily trade practically all listed futures and commodity contracts, looking through out the day for the best opportunities and which markets are moving.
Back to copper – if the stock indices just made their latest spike low and are once again off to the races, copper is likely to quickly trade into the 38200-39000 KRA ( Auction Market Key Reference Area). If 39000 is exceeded it opens the door for higher prices to or above 40200.
