Chile sees slowing Chinese demand for copper, projects price falling in 2022

Commission Chilena del Cobre (Cochilco) acts as an advisor to the Chilean government through the Ministry of mining, focused on copper and its by-products.

(That’s an ‘in a nutshell’ description.)
Cochilco average copper price forecast
  • for 2021 US$4.20/lb (was US$4.30/lb previously, this projection made 3 months ago)
  • for 2022 unchanged at US$3.95/lb
slower growth in the Chinese economy
and therefore copper import falls
China’s policy to sell copper reserves
US Federal reserve to taper stimulus
On the other hand:
  • expectations of economic recovery
  • low inventories
  • limited supply
  • labour disputes
Cochilco predicts a supply deficit for 2021 and a surplus for 2022
  • global copper demand will rise this year and next

Major averages close near unchanged levels

The S&P index did close at a new record high

The major indices are closing their unchanged levels give or take. The broader S&P index traded to a high of 4083.16. That was just short of the all-time high reached yesterday at 4086.23 (but it did close at a new record high).

  • The NASDAQ index is down for the second consecutive day but with only modest declines over each day (the NASDAQ fell -0.05% yesterday and declined -0.07% today)
  • The volatility index (VIX) trades at the lowest level since February 2020. The low reached 16.87% today
  • S&P is up for the fourth of five sessions but only marginally today. The S&P fell -0.10% yesterday.
  • The S&P index did close at a new all-time record high at 4079.95. That took out the high close from Monday at 4077.91.
  • Dow closes higher for the third day in the last four
A look at the final numbers shows;
  • S&P index rose 5.79 points or 0.14% at 4079.73. The high reached 4083.13. The low extended to 4006 8.31
  • NASDAQ index fell -9.536 points or -0.07% at 13688.84. The high reached 13733.03. The low extended to 13653.58
  • Dow rose 15.96 points or 0.05% at 33446.20 . The high reached 33521.76. The low extended to 33347.96
Large cap growth stocks all rose with percentage gains above the averages today:
  • Square, +3.6%
  • Facebook, +2.23%
  • Amazon, +1.72%
  • alphabetic, +1.35%
  • Apple, +1.34%
  • Intel, +1.05%
  • PayPal, +0.95%
  • Microsoft, +0.82%
  • Netflix, +0.45%
The Russell 2000 index of small-cap stocks did not fare well today. That index fell -37.12 points or -1.64% at 2222.05.

Probability and reward-to Risk Assessment -Traders Must Read

  • Never open a position without knowing the initial risk.
  • Define your profits and losses as a multiple of your initial risk (R-multiples).
  • Limit your losses to 1R or less.
  • Make sure your profits on the average are bigger than 1R.
  • Never take a trade unless the reward-to-risk ratio of that trade is at least 2:1 and perhaps even 3:1.
  • Your trading system is a distribution of R-multiples.
  • When you understand #6, you should be able to hear/see a description of a system and know the kind of R-multiple distribution it would generate.
  • The mean of that distribution is the expectancy, and it tells you what you’ll make on the average trade. It should be a positive number.
  • The mean, standard deviation, and number of trades determine the SQN score for your system.
  • Your SQN score tells you how easy it will be to meet your objectives using position sizing strategies. Other than that, your system has nothing to do with meeting your objectives.
  • Systems are usually named after their setups, which are usually based on some attempt to predict future prices. Prediction has nothing to do with trading well.
  • System performance has to do with controlling risk and managing the position through your exits.
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