Saturday, February 6, 2010

Update/Comments 2/6

Copper is heading south with a vengeance, making even mean old bastards like me smile on occasion. So far I've made about $16,000 off this trade so far; this puts my total right around $25,000.. I've more than doubled my money in the three months I've opened this blog. This is one of those "once in a decade" winners you brag about after a few too many scotch/sodas. I'm going to simply let it run, keeping my five cent trailing stop in place. As I think the USD will continue to get stronger and new housing weaker, I can see copper heading to the $2.50ish range. There will be foreign buyers at some point; precisely where is anyone's guess. I simply can't see it going much south of $2.50, but then again... the trend is your friend, and right now copper is falling like an anvil off a table.

Last Thursday there was the beginnings of contagion in Europe; the Greeks were as usual at the top of the mess, but this time the Spanish stock exchange crumbled apart as well and bond buyers demanded more interest before loaning money to Spain and Portugal. Greece and Portugal are small countries; each has ten million or so people.. think Indiana or Georgia in US terms. Spain, however, is a whole other ballgame, with forty million people.. think Texas. The EU by itself could contain problems in Greece and Portugal; Spain is the worry here. Yesterday things calmed down some (after a 9th inning equities rally courtesy of the PPT me thinks, but who's looking), though the European stock markets were still down. Another day or two like last Thursday and the ECB (or someone in the EU) will likely step in and try to contain this before it affects Spain. There was a rumor on ZeroHedge that the ECB would act this weekend at the G7 Summit.. I kinda doubt it. If this was happening in the US, Bernanke would've squashed this bug a week ago, but the Europeans (with sixteen different governments, languages and sets of priorities) are notoriously slow in getting it together.

Wall Street veteran Bruce Krasting's take on this:

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