Monday was a lacklustre start to the week for the LME complex with low volumes causing prices to drift as the usual pre-Christmas lethargy set in. Aluminium explored the 10-day moving average and dipped through it from 2810 in the premarket to 2770 in the morning kerb. However, a short-covering rally in copper came to its aid and prices regained 2815 in the afternoon sessions.
On the face of it, the nearby spread hardly moved with easier Dec-Jan offsetting a tighter Jan-3m, though looks can be deceiving. Dec20-28 (that old chestnut) ended up at 6.00 back (0.29c), while Dec28-Jan17 was worth 10.00 contango. The dominant long was not only patient, but he had deep pockets too it was clear, continuing to hold sway over the equivalent of 50-80% of all open warrants in this morning's WC warrant banding report. Forward movement was limited to an incremental slip in 2007 and 2008.
Tuesday morning's volume via Select amounted to a paltry 463 lots at time of writing, where some 1,500 lots is the norm currently. Trading had resumed at 2798 and after a high of 2805 values were resting on the 10-day average at 2789 as we signed off. Cliff Green Consultancy pegged support and resistance neatly at a $100 band, between 2740/60 and 2840/60, as they held on to shorts looking for renewed bouts of weakness to unfold.
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