Earlier today, Andy Home of Reuters put out a detailed article on record short positions against copper. Below is line from the article:
“The big fund short is back, the money men flexing their bearish views on copper out to 91,547 contracts. That’s a new record, eclipsing the previous record short of 87,942 contracts in July last year.”
It is interesting to note that during times of extreme pessimism, speculators and fabricators augment each other’s efforts – that is to say, they’re both happy as they make more money (with falling prices) in their bearish views. However, when the tide changes, they become mortal enemies, as the actual end-users, the fabricators and manufacturers, trip over each other with the speculators pushing their prices higher and higher.
We recall Winston Churchill’s brilliant comment about his change of tone once America had entered World War 2. Paraphrasing: “Oh! That is the way we talked to her while we were wooing her; now that she is in the harem, we talk to her quite differently.”
The stage is set. Let’s see how these bearish bets unwind in the coming weeks and months.
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