It’s A Miracle! March 15th, 2019 by John Gross
There is no other logical explanation for the miraculous appearance of 74,650 metric tonnes of copper into LME warehouses in 48 hours.
Just like that – 164,574,883 pounds shows up out of nowhere. To put this into perspective, it would take 3,740 trucks to carry the load, or 914 railroad box cars, each with 180,000 pounds of capacity.
Let’s see, a railroad box car is about 56 feet long, times 914 rail cars equals about 51,184 feet, or a train about ten miles long. Ummmm –
And how many people would it take to off load the trucks or trains? How about the paper work – we are talking about 2,986 warrants of 25 mt each that have to be processed.
By what method is all of this even humanly possible?
The value, you ask? Let’s see, at $2.90 per pound, we are looking at $477,267,160.70, or roughly, almost a half a billion dollars.
Very Odd. Seems like something is wrong with the numbers, or the system is not working as it was originally intended for the entire industry.
And what does the Good Dr. Copper have to say about the situation? He reportedly said, “Well, on Thursday the price fell 4.50¢, and Friday it was up 1.50¢, so I am just as confused as everyone else is”.
OK, with that out of the way, now take a look at the weekly bar chart for copper. Aside from all the back and forth motion over the past few years, from a macro point of view, copper has made higher highs, and higher lows after hitting bottom in January 2016.
While the ‘trade tirade’ threw things off for a while, with copper falling sharply back in June, then moving sideways for about nine months, it finally broke through overhead resistance a few weeks ago.
Now Big Red is facing the big technical test – that is to say, ‘Will Old Resistance Now Become New Support’?
And just as important, if it does in fact become a new area of support, where do we go from here?
View Charts (PDF)