Copper futures made a daily-scale bottom extension yesterday. We had been long of this instrument until the position timed-out on the 2nd July, just before the recent drop, and we would now buy again. We are short of two other commodity markets – crude oil and soya oil – with the intention to take partial or full profits on each in the next day or two. This probably means that we are going to see a shift from holding generally short positions to being generally long in commodity markets and our preferred targets will be the grains in this rotation.
There are weekly-scale signals in all the grains that indicate longer-term upmoves, as reported earlier in the year. We were long of Corn and Soya beans for the start of the upmove a few weeks ago until we took profits at the end of June and will seek to re-adopt those same positions (or possibly buy wheat) next. This longer-term grain bullishness is probably a consequence of the looming ‘El Nino’ but we are just following our signals, as usual.
