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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in Japanese... More
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  • Is Copper Ready to Crash? 1 comment
    Feb 14, 2010 12:00 PM | about stocks: FCX
    Respected metals analyst, David Threlkeld, president of Resolved Inc., dropped a real bombshell on the copper market yesterday, when he predicted a crash from the current $2.82/ pound to below the production cost of $1, possibly as early as this year. He is arguing that prices are artificially high because of runaway Chinese speculation and stock piling, which will end imminently. Stockpiles are now bulging with 2 million tons of the red metal, about half of annual industry production. The Middle Kingdom is about to cut imports by half, from 3 million tones to 1.5 million tons this year, to bring them more in line with actual consumption. I piled readers into copper a year ago at $1.25, and producer Freeport McMoRan at $25 (click here for the call). I put out my first warning that trouble was headed copper’s way on December 10 (click here for the call). Copper hit $3.54 on January 8, while FCX topped out at $90.40. Since then, the red metal has fallen by 20%, while FCX is down a nausea inducing 25%. Copper is the only commodity that has a PhD in economics, as it is such a sensitive predictor of future economic activity. It sends out signals that are so blatantly obvious that even I can see them without having to squint through my reading glasses. The recent price action tells us the eminent doctor is about to give the world economy a big fat “F” on its next report card. And if copper is in big trouble, can the rest of the carry trade assets be far behind?
    Stocks: FCX
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  • solrac
    , contributor
    Comments (23) | Send Message
     
    MHFT,

     

    Given that Copper rose so rapidly since last March and is now falling. Where or how far do you see it retracing?

     

    Thanks in advance.

     

    solrac
    15 Feb 2010, 09:42 AM Reply Like
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