Copper futures broke down from a daily scale compression earlier in the month and have since bounced back to it again:
As regular readers will recognise, these ‘returns to compression’ usually offer a second chance to take a trade after a compression break, so we advise selling short ‘at market’.
The original break is often too quick to catch and there is a risk of false breaks, so these ‘returns’ offer greater certainty about direction – in this case the compression broke downward, so starting a downtrend – and a good balance between risk & reward. If the price moves back up through the original compression we will cover these shorts.
