Coming Up For Air
Yesterday the March-February copper(x2)/gold spread close above the ‘even money’ mark for the first time since the first half of November. This triggered an entry signal for the blog, so a hypothetical long position was entered at +$25 (premium copper). The initial liquidation plan is to get out on a two-day close below -$6,085 ($500 below the contract low).
The last couple of times this spread inverted and then climbed back above ‘even money’ a rally of several thousand dollars occurred. So we’ve got that working for us already.
The declining 100-day Moving Average will be the next technical barrier for the March-February copper(x2)/gold spread. The rallies into the September and November highs peaked just before the spread hit the 100-day MA. Therefore, a two-day close above the 100-day MA (currently around +$1,750) for the first time since mid-June would signal a bullish trend change and add more confirmation to this week’s recovery. Once the move gets some traction, we will begin to discuss the possibility of adding to the long position.