It is very dangerous to continue to short copper

It is very dangerous to continue to short copper

it is very dangerous to continue to short copper, which will seriously affect the measurement results of equipment. If there are domestic copper enterprises wantonly hedging at the current price, they hope to reduce hedging and continue to hold cash. Recently, hedge funds have been committed to scientific research and graduate education in the copper market. The mechanical short selling energy has been excessive, and the clearance has reached a new high since mid March 2009, when the wear limit of parts was required not to exceed 25% of the size tolerance of parts. Short selling has reached a 10-year high, and invisible buying began to appear outside the market last week. It is very dangerous to continue to short copper. If there are domestic copper enterprises hedging at the current price, they hope to reduce hedging and continue to hold spot. Recently, hedge funds' speculative short selling energy in the copper market has surged excessively, with the clearance hitting a new high since mid March 2009, and the short position hitting a 10-year high. Last week, invisible buying began to appear outside the market. The data in recent 10 years shows that the clearance position of hedge funds basically means that the copper price is at a stage, even at the bottom of the medium and long term. Risk warning, wait and see

in the past 10 years, the fund's headroom position has been at the current level for three times, namely in early February 2007, January 2009, and the current stage. In terms of the first two operations, copper prices have formed a very obvious medium - or medium - and long-term bottom. The bottom formed in early February 2007 was not broken down until the financial crisis stage in October 2008, while the bottom formed in January 2009 still shows an excellent long-term bottom, which itself is also the bottom formed in the financial crisis stage in 2008

from the actual operation of hedge funds, in the five months from late June to late November 2006, the fund showed accurate foresight in short selling at high prices in the futures market, followed by a round of significant decline in copper prices, and hedge fund short sellers made a lot of profits. However, the short selling of the fund in that round seemed to be hesitant, and the overall short selling energy was not very large

after July 2008, some hedge funds may find signs of the U.S. subprime mortgage crisis and short the copper price, but they are also full of hesitation. Until December 2008, when the copper price fell to $2900, the total short energy of hedge funds is not very large. Subsequently, the copper price quietly reversed and rebounded, and many hedge funds continued to short when they saw a weak rebound, with large short positions held until early August 2009. Who knows, the copper price still does not need to reach a balance technically and commercially, and the monetary stimulus of central banks remains the same. Hedge fund bears have to stop losses on a large scale and admit defeat. Therefore, hedge funds generally did not perform well in the copper market that took advantage of the financial crisis in 2008

looking back on the recent round, hedge funds' efforts to short the copper market are stronger than the previous two rounds. From the record short positions and long short two-way total positions, we can see that its source of funds is much more abundant than when there was a capital chain dilemma in the 2008 financial crisis. This also reflects that the ultra loose monetary policies of various countries have made the capital flow of hedge funds very rich. However, can this round of speculative short selling achieve strategic victory? I think it is still hanging. First of all, in the past 10 years, the current level of clearance positions means that the market is at the bottom of the medium and long term. This round of short selling also has a strong theme chasing factor. Hedge funds have ignored the supporting effect of global liquidity flooding on resource prices

of course, at present, both in terms of market capital flow and price patterns, they are in the left stage, so we can be appropriately cautious in bottom reading. However, at this stage, if we continue to short and enterprises continue to hedge, it is likely to fall into the trap of the bottom in the medium term. Therefore, the author suggests that the current copper enterprises should not consider hedging in the copper market for the time being, and even actively reduce their hedging positions