Adam Sarhan Quoted In Reuters: TECHNICALS-Copper's slump this week isn't over, chartists say – RTRS

14-Jan-2015 15:05

By Marcy Nicholson

NEW YORK, Jan 14 (Reuters) – NEW YORK, Jan 14 (Reuters) – Copper’s 12-percent dive so far this week has sliced through key support levels, setting up a deeper slump that some chartists say could test the market’s decade low following the 2008 financial crisis.

This week’s slump, which is so far the biggest since 2011, has knocked copper to its lowest prices in five and a half years, pushing benchmark Comex third-month futures down to $2.4235 per lb and London Metals Exchange to below 5,500 a tonne.
Feeding the selloff was a confluence of fundamental factors such as a new Chinese export tax policy, negative sentiment from the swoon in oil markets and weak global growth. But it intensified as sell-stop orders kicked in at key technical levels.
The spike lower pushed the Comex contract below the 61.8-percent Fibonacci retracement of the rally from the Dec 2008 low at $1.2595 to the Feb 2011 high at $4.6345.
The 2007 low around $2.40, which marked a so-called “V-bottom reversal” was also seen as providing temporary technical support.
The market also broke below trendline support defined by the lows in June 2012, April and June 2013 and again in March 2014, all key points on the copper market’s slow slide. That support was effective at around $5,750 a tonne for LME this week.
“Copper’s in a severe bear market so the path of least resistance is lower. The last 48 hours, fear has dominated the market,” said Adam Sarhan, chief executive of New York-based investment advisory firm Sarhan Capital.
He expects a brief, near-term bounce may be in the works but that U.S. copper futures still have plenty of room to fall back to the December 2008 trough of $1.2595.
“The important support is the December 2008 low. If that goes, ‘goodnight Irene,’ but that’s a long way away.”
Terence Gabriel, technical strategist at IDEA global in New York, says the sharp downward action shows an acceleration of the contract’s prevailing decline, weak momentum and rising volatility.
“There isn’t any indication yet that this bearish trend that’s in place is exhausted yet, but if you look at the monthly chart, there’s a tendency for the market to … collapse very fast and reverse,” he said.
Gabriel said the contract will likely not find support until roughly $2.30, which marks a support line dating back to 2001 on a log-scaling monthly chart, with the next support level around $1.82-$2.05. “The overall backdrop is for falling commodity prices and industrial metals in particular are still bearish,” he said.

Adam Sarhan Reuters Copper Quote 12.6.11



Tue Dec 6, 2011 2:39pm EST
* Copper off over 1 pct as euro zone worries persist
* “Greater downside risks” for Asian economies adds weight
* Markets cautious ahead of EU summit, ECB meeting
* Coming up: German Oct industrial output on Wednesday
By Chris Kelly and Susan Thomas
NEW YORK/LONDON, Dec 6 (Reuters) – Copper fell over 1 percent on Tuesday, hit by Standard and Poor’s recent downgrade warning for the euro zone and fears Chinese growth could slow further, limiting demand prospects from the world’s top metals buyer.  Down for the first time in three days, copper fell in tandem with other risk assets like global equities and the euro, after Standard & Poor’s warned late on Monday it could cut credit ratings of 15 euro zone countries, including the top-tier ratings of Germany and France, the region’s two largest economies.
Further pressure in the red metal stemmed from a warning about emerging East Asian economic growth, fanning worries that China’s near 40-percent intake of global copper demand could ease if economic conditions deteriorate.    “It’s a question mark about the outcomes in Europe and in China,” said Adam Sarhan, chief executive of Sarhan Capital.  “Regarding China, we’re continuing to dance back and forth between whether or not they have a hard landing or a soft landing.”
London Metal Exchange (LME) three-month copper shed $105, or 1.3 percent, to end at $7,835 per tonne. Open interest grew over 5,700 lots to 298,590 lots on Monday — its highest level since April.    In New York, the key March COMEX contract fell by 4 cents to settle at $3.5755 per lb, after dealing between $3.5250 and $3.5830.    Futures volumes remained on the light side at the start of the week. A little more than 40,000 lots traded late in New York – a third below the 30-day norm, according to preliminary Thomson Reuters Data.
Technically, copper’s price behavior was “semi-constructive”, analysts said, consolidating in the upper end of the range from last Wednesday’s breakout. Copper has fallen more than 20 percent from a record high of $10,190 per tonne and $4.60 per lb in February, but has risen almost 18 percent since late October. It rose nearly 10 percent last week. “Copper is slightly down because of the S&P threat to downgrade euro zone countries and because of little traction on equity markets, but the sentiment is still cautiously optimistic,” said Andrey Kryuchenkov, an analyst at VTB Capital.
A summit of EU leaders will try to put together a convincing agreement on Friday. The S&P warning hurt the euro, but the currency recovered after a surprise jump in German industrial orders. The dollar gave up most of its earlier gains but remained in positive territory against a basket of currencies . A stronger dollar makes commodities more expensive for holders of other currencies.
“Until we see a structural solution for the euro zone debt problem, we will not change our bearish view on metals,” said Gianclaudio Torlizzi, a partner at metals consultancy T-Commodity. “But we are flexible. The situation is very fluid, and can change from one day to the next.”ASIAN RISK
The ADB said in its Asian Economic Monitor that Emerging East Asia’s economic momentum remained robust, but the region faced greater risks than just three months ago as Europe’s debt problems and the fragile U.S. economy could worsen into another global crisis.
“We are still in an economic slowdown and latest economic data from the U.S. such as factory orders were weaker than expected,” Credit Suisse said in a note. “We also think that the $8,000 mark for copper will be difficult to break.” Three-month tin , was untraded at the close but was last bid at $20,300 per tonne up from $19,900 at the close on Monday. But the metal is still down around 40 percent since a record high $33,600 hit in April.    Smelters in Indonesia’s main tin-producing region of Bangka island stopped shipments from Oct. 1 in a self-imposed bid to push benchmark tin prices above $23,000 a tonne. But some smelters started to flout the ban last week.
Tin stocks rose 230 tonnes to 12,395, and tightness in the market has been eroding since last week. Canceled warrants, or metal earmarked for delivery, have almost halved to 11 percent from 20 percent last week.
Metal Prices at 1920 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal            Last      Change  Pct Move   End 2010   Ytd Pct
COMEX Cu       357.50       -4.05     -1.12     444.70    -19.61
LME Alum      2112.00      -18.00     -0.85    2470.00    -14.49
LME Cu        7834.00     -106.00     -1.34    9600.00    -18.40
LME Lead      2125.00        5.00     +0.24    2550.00    -16.67
LME Nickel   18400.00     -105.00     -0.57   24750.00    -25.66
LME Tin      20300.00      400.00     +2.01   26900.00    -24.54
LME Zinc      2044.00        4.00     +0.20    2454.00    -16.71
SHFE Alu     16170.00      -50.00     -0.31   16840.00     -3.98
SHFE Cu*     57670.00     -290.00     -0.50   71850.00    -19.74
SHFE Zin     15670.00      -45.00     -0.29   19475.00    -19.54
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07

Latest Media Quote: US Stocks Climb As Retail Sales Top Expectations

Nov. 15, 2010, 10:32 a.m. EST

By Donna Kardos

NEW YORK (MarketWatch) — U.S. stocks rose Monday following better-than-expected retail sales, although the gains were limited by disappointing manufacturing data and a rise in inventories that investors fear might have been too big.
The Dow Jones Industrial Average climbed 49 points, or 0.4% to 11241, in early trading. Caterpillar was among the measure’s best performers with a 1.1% increase after the heavy-equipment giant said it will buy mining company Bucyrus International for about $7.6 billion. Under the agreement, Caterpillar will pay $92 for each Bucyrus share, a 32% premium to Friday’s closing price. Shares of Bucyrus, which is not a Dow stock, surged 29% to $89.74.
The Nasdaq Composite edged up 0.2% to 2523. The Standard & Poor’s 500 index added 0.4% to 1203.
The advance came as data showed U.S. retail sales surged in October, topping expectations on robust car sales and solid spending for a broad array of merchandise going into the holiday shopping season. Retail sales rose 1.2% last month, the biggest rise since March and larger than the 0.8% increase that was expected.
However, excluding autos, all other retail sales rose 0.4%, just shy of the 0.5% gain that was expected.
Also keeping Monday’s climb in check, the November reading of New York-area manufacturing activity from the New York Fed came in at negative 11.14, down from 15.73 in October and below economists’ expectations for a reading of 13.00. Measures of new orders, employment and prices received all fell.
Together, the data reflect that “growth is anemic,” said Adam Sarhan, chief executive of Sarhan Capital. “In general the economy’s still recovering but it’s limping along. It’s not a robust recovery.”
The anemic growth had investors fretting that a bigger-than-expected rise in inventories at U.S. businesses in September could leave companies holding too much inventory if the holiday-shopping season disappoints. Inventories increased 0.9% from the prior month to a seasonally adjusted $1.403 trillion, above the 0.6% increase economists had expected. August inventories also rose 0.9%, revised up from a 0.6% increase.
Overseas, worries persisted over the debt situation in euro zone countries including Ireland and Greece. Europe’s debt crisis has entered a critical new phase as Ireland resisted pressure from the European Central Bank and national governments to seek a bailout amid growing concern that the currency bloc could unravel.
Ireland fiercely denied that it was in bailout talks, and European officials publicly insisted Dublin was under no pressure to seek help. Meanwhile, the Greek government vowed to press ahead with tough fiscal reforms despite an upward revision in its 2009 deficit by the European Union’s statistics agency, Eurostat.
The bigger concerns are still looming,” Sarhan said, noting that investors’ key concerns remain “the health of the global recovery, the debt concerns out of Europe, and what the dollar is doing in relation to the currency wars.”
Following criticism from Germany and China last week, the Federal Reserve’s latest attempt to boost the U.S. economy is now coming under fire from Republican economists and politicians. A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds.
The dollar climbed even as stocks rose, deviating from their usual inverse relationship. The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, climbed 0.5%.
Treasurys fell slightly, lifting the yield on the 10-year note to 2.84%. Crude-oil futures rose above $85 a barrel while gold futures edged higher.
Among stocks in focus, BHP Billiton abandoned its US$39 billion bid for Canadian fertilizer company Potash Corp. of Saskatchewan, raising questions about the growth prospects of the world’s biggest miner amid increasing resistance from governments and global regulators to major takeovers. BHP rose 1.1% while Potash fell 1.4%.
Lowe’s said its fiscal third-quarter earnings rose 17% as revenue and margins improved, though sales were lower than expected. Its shares climbed 1.7% even as the home-improvement retailer lowered its earnings forecast for the year.
Full Story:

US Stocks Fluctuate Between Small Gains and Losses

April 15, 2010, 11:58 a.m. EDT
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks fluctuated between slight gains and losses Thursday as the industrial sector was boosted by improving manufacturing conditions, but an unexpected jump in weekly jobless claims and an expected monetary policy tightening in China weighed. The Dow Jones Industrial Average recently was down 10 points, or 0.1%, to 11114, in recent trading.
Hewlett-Packard was among the measure’s worst performers with a drop of 0.7%. German and Russian authorities are investigating whether Hewlett-Packard executives paid millions of dollars in bribes to win a contract in Russia, according to a Wall Street Journal report citing people familiar with the matter. Wal-Mart also weighed with a drop of 0.8% after the chief executive of its U.K.-based supermarket chain Asda set out plans for a big expansion of its stores, but said the company is cautious about the economic outlook.
However, Intel jumped 2.4%, extending the stock’s gains after the chip giant posted strong first-quarter earnings Tuesday afternoon. Caterpillar was also strong, up 1.4%, boosted by a strong round of manufacturing data for the New York and mid-Atlantic areas.
The Nasdaq Composite gained 0.2%. The Standard & Poor’s 500-stock index slipped 1%, with the consumer staples sector leading its declines. But the industrial sector climbed, led by United Parcel Service. The shipping giant said its first-quarter adjusted earnings jumped a better-than-expected 37%, as the company improved operating margins across all three segments and noted improvement in its international package and supply chain businesses. UPS jumped 5.9%.
Also boosting industrials, New York manufacturers saw business conditions improve in April, according to the Federal Reserve Bank of New York’s Empire Manufacturing Survey released Thursday. The report also showed further gains in the labor markets this month and expectations remained bright. Meanwhile, mid-Atlantic manufacturers posted better-than-expected improvement this month, paced by new orders, according to a report released Thursday by the Federal Reserve Bank of Philadelphia.
It shows that the economy from the basic level, from the ground up from manufacturers, is improving,” said Adam Sarhan, chief executive of Sarhan Capital. “The fact that we have stronger-than-expected numbers on the manufacturing front bodes well for the economic recovery, especially if inflation is tame.
Other economic data released Thursday was less encouraging. The Labor Department said in its weekly report that initial claims for jobless benefits rose 24,000 to 484,000 in the week ended April 10, marking the second-straight week of increases in initial claims. Economists surveyed by Dow Jones Newswires had expected a drop of 15,000.
Meanwhile, China’s government released data showing its economy expanded 11.9% from a year earlier in the first quarter of 2010, a strong result that highlighted the increasing risks of overheating. The growth was faster than the 11.5% median forecast of economists surveyed by Dow Jones Newswires, and increased expectations for China’s central bank to undergo tightening measures.
“Obviously China is going to have to tighten policy because it cannot run at an 11.9% GDP pace for very long,” said David Chalupnik, head of equities at First American Funds. “That’s taken as a negative for the market.”
The dollar strengthened against the euro as Greece lowered expectations on the amount it hopes to raise from a global dollar bond at the end of this month and may even drop the plan altogether, two government officials said Thursday, raising the specter of a European Union and International Monetary Fund bailout.
The dollar weakened against the yen although the U.S. Dollar Index, which tracks the U.S. currency against a basket of six currencies, climbed 0.4%. Treasurys advanced, pushing the 10-year note to a yield of 3.84%. Crude-oil futures edged down while gold futures edged up, reversing earlier declines.
Still to come, the April housing index will be released at 1 p.m. EDT.