Copper’s chart is really a sight to behold from an Elliott Wave Perspective. The impulsive counts look solid, and the corrective waves do as well.
Copper itself has just fallen off a cliff, losing 10% before bouncing for 1% yesterday. There is a good read here, and a Zero Hedge author had the same article title idea.
The only thing I don’t like is that there isn’t a clear count to the downside when you zoom into to the 15 minute chart, so I’m not sure where to enter the trade. The decline shown above is straight down, which to me, could mean we are in an E wave down – but I don’t love any count that would result in that.
As you can see in this chart below I haven’t labeled any sub-wave counts. I would feel comfortable selling at the gap if the market gave us a rally, and/or I could feel good adding to shorts at any of the Fibonacci retracement levels – but overall the market is due for a dead cat bounce any time. But if we are in an E wave to the downside there could be no stopping for a distance.
I do feel like there is a disparity in option prices, after a market fall like this I would expect out of the money puts to be significantly more expensive. I like that there is open interest on the 2.25 put as there is a slightly higher chance of liquidity and fair price on exit if it is a more commonly traded option… but this market is always thin so be aware of that. And there is the calendar spread to consider, but it’s only about 1 penny difference so I don’t think that will affect things much.
There is no guarantee this continues down further, good luck!
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