Just two days ago, a large bullish call roll appeared in copper giant Freeport McMoRan (FCX). The red metal’s gone straight up since the options trade appeared.
Copper futures (@HG) rose about 1.8 percent today, their fourth consecutive positive day. Press reports attributed the move to a strike at Chile’s key Escondida mine, although there seem to be other factors at play as well. First, copper traditionally rises in a strong economy because it’s used in things like wires, pipes and machinery. Second, the chart is showing signs of breaking out of its tight range over the last two months. Third, the U.S. dollar (@DX) is starting to go down and the Australian dollar (@AD) is starting to go up. Historically, copper has followed the Aussie.
So far, not many people have even noticed the move. We just wanted to follow up the bullish trade in FCX and keep an eye on an area of the market that’s been largely forgotten over the last year or two.
