Short The Nasdaq (and Copper too?)

JC Parets
May 4, 2021

A funny thing happened last week.

Copper prices closed the month at the exact price where it closed in February of 2011, right before it proceeded to get cut in half.

If Base Metals were to correct, wouldn't this be a logical place for it to occur?

With Copper making new all-time highs, there's little evidence in price, so far, that a crash or any kind of epic disaster is about to begin.

Positioning, however, could play a factor. With prices of Copper at All-time highs, Speculators have on historic net long positions. Meanwhile, Commercial hedgers have on one of their largest net short positions of all time.

It's vulnerable if it's below $4.48, which it is currently not. So we'll continue to monitor the situation.

Moving over to equities, with so many breadth and momentum divergences in the Nasdaq, it's hard to ignore this potential double top. The Nasdaq's Advance-Decline Line is rolling over, the Nasdaq new highs list is almost non-existent, and we're even getting some expansion in the new lows list.

The bottom line is, if the Nasdaq100 $QQQ is below 336, not only do we not want to be long, but a tactical short position with a target back towards 275 makes sense:

To be clear, under no circumstances can we have on long positions in the Nasdaq100 if $QQQ is below 336. The potential price risk as well as the opportunity costs are off the charts.

We discussed all of this and more on last night's Monthly Strategy Session:

Let me know what you think!

Contact me here.

JC

 

Filed Under