First, we saw a reversal of the move above previous highs in world stocks.
Secondly, we saw that when the USD index started to recover after being badly beaten up and when the sentiment for it was very bad (and everyone and their brother kept repeating different reasons for “de-dollarization”).
The latter is important because it shows that it is not “just a decline from the same price level” that makes the current situation such as that of 2007/2008 and 2022 a top level.
It could be that the tariffs that Donald Trump proposes are included in the price and that world shares fall as a result. After all, despite political reasons, this is something that is likely to be bad for international trade, and many of the world’s economies could be affected.
And what happened in both of the above cases when world stocks fell? Mining stocks actually plummeted. And this, my friends, is the likely outlook for the coming months, despite the current corrective upturn.
Still, for now it looks like profits from our long positions will rise a bit before we close them.
Corrections like the current one are useful not only because they can be profitable, but also because they can tell you which parts of a particular market or sector are likely to fall when the next move lower occurs.
Copper and broader raw materials
As you know, I’ve commented on FCX’s bearish potential, and given the size of the rebound right now, all of these bearish points remain valid.