Negative asymmetry is formed in the setting of copper flows. The range-bound price action resembles the time decay of trend signals, which reduces the chainsaw barrier in algorithm mode, notes Daniel Ghaly, chief commodities strategist at TDS.
CTAs can turn into building a large net short position
“Our simulations of future prices suggest that there is no plausible scenario of price action that could trigger subsequent CTA buying activity at the present time, but on the contrary, the bar is low for CTAs to sell their entire book for an extended period.”
“In fact, a sustained decline in prices may force CTAs to abandon their net long positions and move toward building a large net short position, in a series of selling programs that could total up to -55% of maximum algae volume.”
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