The Compelling Case For CPER On The Correction

seekingalpha08-21

Copper futures hit a record high of $5.20 per pound in May 2024 before falling below $4 in August.Chinese economic weakness and rising inventories weigh on copper prices, but the long-term bullish ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Compelling Case For CPER On The Correction\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-21 02:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4715952-the-compelling-case-for-cper-on-the-correction><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Copper futures hit a record high of $5.20 per pound in May 2024 before falling below $4 in August.Chinese economic weakness and rising inventories weigh on copper prices, but the long-term bullish ...</p>\n\n<a href=\"https://seekingalpha.com/article/4715952-the-compelling-case-for-cper-on-the-correction\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"CPER","symbol_name":"美国铜指数基金","start_time":0,"source_url":"https://seekingalpha.com/article/4715952-the-compelling-case-for-cper-on-the-correction","article_id":"2461838810","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/172876096/image_172876096.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2461838810","pubTimestamp":1724176981,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Copper futures hit a record high of $5.20 per pound in May 2024 before falling below $4 in August.Chinese economic weakness and rising inventories weigh on copper prices, but the long-term bullish tre","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"CPER":"美国铜指数基金","BK4550":"红杉资本持仓","BK4588":"碎股","FDN":"First Trust Dow Jones Internet I","BK4585":"ETF&股票定投概念"},"translate_title":"CPER纠正的令人信服的理由","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CPER":1,"FDN":0.9,"HGmain":0.9},"content_text":"Copper futures hit a record high of $5.20 per pound in May 2024 before falling below $4 in August.Chinese economic weakness and rising inventories weigh on copper prices, but the long-term bullish trend remains intact.A compelling case for higher copper prices includes green energy initiatives, potential U.S. recession, and weakening U.S. dollar.CPER is a copper ETF product.   mabus13 Copper futures (HG1:COM) soared to a nearly $5.20 per pound high in May 2024, when the rally ran out of upside steam. In an early June 2024 Seeking Alpha Article on the United States Copper Index Fund, LP ETF product (NYSEARCA:CPER), I concluded: I am a scale-down buyer of copper after the most recent correction. While it is challenging to pick lows because markets tend to fall to irrational, illogical, and unreasonable prices during corrections, the same holds on the upside. Therefore, the ultimate peak for the red metal could be significantly above the $6.80 per pound target.  Nearby COMEX copper futures were at the $4.6625 per pound level on June 3, with the CPER at $28.66 per share. Copper’s descent has continued, with the price falling below the $4 level in August, which could be an irrational, illogical, and unreasonable price, given the red metal's fundamentals. However, the current price of any asset or commodity is always the correct price because it is the level where buyers and sellers meet in a transparent marketplace. Chinese economic weakness, rising inventories, and the potential of a U.S. recession have weighed on copper, driving the metal to levels where the potential for a recovery is increasing. Meanwhile, the rally to the May 2024 record high may have been a sign of things to come, and the current correction a golden buying opportunity for investors and traders with patience and perseverance. Copper falls over 20%- A bearish short-term trend, but the bullish long-term trend remains intact Nearby COMEX copper futures reached a record $5.1990 per pound high in May 2024, when as mentioned, they ran out of upside steam.   Long-Term COMEX Copper Futures Chart (Barchart) The monthly chart dating from the early 1970s shows the substantial 24.58% correction that took nearby copper futures to a $3.9210 per pound low in August. While the short-term trend remains bearish, with September copper futures at around the $4.15 level, the long-term bullish path of the least resistance remains intact. Critical technical support levels are at $3.5195, the October 2023 low, and $3.1315, the July 2022 bottom. China and inventories push copper lower Chinese economic weakness has weighed on copper prices, as China is the world’s leading copper consumer.   Refined Copper Consumption in 2023 (Statista) The chart illustrates that China consumed 57% of the world’s refined copper in 2023. The slowdown in China’s economy has weighed on the price and was one of the causes of the correction from the May highs. Moreover, the rising prospects for a U.S. recession is another factor for copper’s price weakness. Meanwhile, the London Metals Exchange is the world’s leading copper exchange. LME warehouse stocks can provide supply demand clues. When stocks decline, they tend to highlight demand strength, while when inventories rise, they often indicate demand weakness. At the end of 2023, 167,300 metric tons of copper were in LME warehouses. On August 19, inventories were 84.15% higher at 308,075 tons. The substantial increase in LME stocks is weighing on copper prices. Critical support remains below the current price After a nearly 25% decline, it is difficult to imagine that copper remains in a long-term bullish trend. However, the pattern of higher lows and higher highs remains firmly intact despite the latest $3.9210 low.   Ten-Year COMEX Copper Futures Chart (Barchart) The ten-year chart shows that copper’s trend has been higher after trading to a $1.9725 low in March 2020, when the global pandemic gripped markets across all asset classes. While the most recent decline has been ugly, the bullish trend remains firmly intact, and the odds favor another higher low. The compelling case for copper-China, green energy, supply demand fundamentals In late August 2024, the compelling bullish case for copper includes:  The long-term technical trend remains higher, and the trend is always your best friend. Copper is a critical ingredient in green energy initiatives, including but not limited to electric vehicles and wind turbines. China will eventually emerge from its sluggish economic growth. When Chinese conditions improve, copper demand will likely rise, and stocks will decline. The U.S. dollar is the world’s reserve currency and copper’s pricing mechanism. A weaker U.S. dollar favors higher copper prices. The U.S. Fed looks set to reduce short-term interest rates over the coming months. Lower rates decrease the cost of carrying copper inventories, which supports higher prices. The bifurcation of the world’s nuclear powers threatens the U.S. dollar’s role as the world’s top currency. As China, Russia, and their allies increase de-dollarization, the dollar’s dominant global position could decline, leading to higher prices for copper and other raw materials.  The decline to the $4 level could be a golden buying opportunity in the copper market. CPER is an ETF that tracks COMEX copper futures The U.S. Copper ETF product tracks the red metal's price. At $26.10 per share, CPER had $168.06 million in assets under management. CPER trades an average of 138,720 shares daily and charges around a 1% management fee. Copper’s latest recovery took the September futures price 7.29% higher, from $3.9210 on August 7 to $4.2070 on August 20.   Chart of the CPER ETF Product (Barchart) Over the same period, CPER rose 6.76% from $24.70 to $26.37 per share. One drawback of CPER is that copper trades around the clock, while the CPER ETF is only available during U.S. stock market hours. CPER can miss highs or lows when the stock market is closed. The case for higher copper prices remains compelling at the $4 per pound level. While it is virtually impossible to pick bottoms, copper’s long-term bullish trend suggests another higher low is likely. I would leave room to add if copper prices make lower lows over the coming days and weeks, but the odds favor higher highs over the coming months and years.  Buying copper on price weakness has been the optimal approach since the turn of this century. While copper’s price has been volatile, buying copper on price corrections for nearly a quarter of a century has rewarded traders and investors with patience and perseverance.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2461838810"}