Copper Showing Unusual Strength Today (JJC, FCX)

Despite continuing weakness in the broader markets, copper continues to be strong today, last trading up 9 cents to $3.30 per pound on the September contract. This may be nothing more than a relief rally, as the industrial metal had fallen 4 of the past 5 trading sessions. Investors may want to use the strength in copper to short shares of the copper ETF, Ipath Dow Jones Ubs Copper Total ETF JJC or copper miner Freeport McMoran FCX. The 2nd revision to 2nd quarter GDP is expected to be released tomorrow, with economists expecting a reading of 1.4%. Most traders are expecting a reading worse than that, as the recent economic numbers have not been strong, and are showing weaker growth than expected, and some of the readings are showing contraction. If the GDP report comes in worse than the 1.4% that economists are expecting, I would expect anything related to industrial metals and manufacturing to be hit fairly hard. As such, traders may want to position themselves by buying shares of JJC or FCX near the close today to capture the sharp down move many are expecting. Once again, I do not believe that this bounce in copper is anything more than short covering and would look to short on any strength in shares of JJC or FCX.