The U.S. election is about to give its final answer this week. The ups and downs of swing state data have caused some sensitive assets to take a roller coaster trend around last weekend.
However, there are still some varieties fluctuating within a narrow range. Obviously, their breakthrough direction is likely to determine the market tendency in the next stage.
Today we are going to talk about copper, which we haven't talked about for a long time. As a wide variety similar to crude oil, copper prices have gone out of a complete bull market and bear market in the first 11 months of this year, and are now just at the central axis level. What's more interesting is that in the past half month, the price has been running within a narrow range of 4.3-4.4 X.
Copper has always been said by Dr. Copper, implying that its price rise and fall will be highly correlated with the market's risk appetite and the economic environment. Today's wandering trend is obviously waiting for the election results to be released.
Although we have said before that no matter who comes to power, the medium-term choice is to suppress the high market valuation and launch its own new targets, but there is still a gap in short-term behavior. In theory, Harris will make the transition of the market smoother, while Trump will do it faster and fiercer.
In terms of copper prices, Trump's second entry into the palace is likely to mean the restart of G2 friction and the intensification of anti-globalization. Following this logic, copper prices should break out of the range and fall, thus launching a subsequent market risk appetite RISK OFF situation.
On the contrary, the upward breakthrough of copper may correspond to Harris's election. Of course, these are theoretical conclusions. In fact, all we need to pay attention to is how the market itself chooses its direction. Upward, then there is a high probability that risky assets similar to the U.S. stock index will continue to remain strong and slowly ship amid shocks or tug-of-war; Down, you need to prepare a plan for further in-depth adjustment. In other words, after the election results, if the copper price rises, you can be long on risky assets; if the copper price falls, you will be bearish on risky assets in stages.
All the above mentioned are aimed at short-term behaviors. In terms of medium-term trends, copper also has relatively important reference value. Judging from the cyclicality of the past 20 years, copper has relatively obvious trend characteristics: a roller coaster market, a sharp pullback after a sharp rise, and a decline usually has a small platform, and then accelerates after falling below.
Starting from 2020, after the copper price started below US $2, it broke through the highest US $5. The current weekly platform is around 3.92, so this position will be the potential level for the medium-term price to accelerate its downward trend. The previous two sharp drops in copper prices were also accompanied by large-scale global financial crises, so if there is a real break, it is very likely that we will also see a crisis or big geopolitics. In that environment, we will not lose money or Losing less money can outperform most investors.
Generally speaking, although the results of the general election have yet to be announced, and the trend of copper prices can go up or down, I personally still think that there is not much time left for us for good times. In the future, how to find a trading model that suits you in an environment where it is difficult to make money or even lose less money may be the main task in the next 1-2 years.
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