Seriously. $FCX at new highs! Shorts were taken out by a huge surprise up move!

Look at the strong uptrend that is FCX is showing! The stock is on fire. It correlates with the dollar weakness and the copper rally.

However, I am still skeptical about this rally as the fundamentals are not supporting this climb.

While analysts might have adjusted earnings estimates higher due to the higher copper prices, the demand might be muted through the year end. US Steel has already said that orders are weakening, Alcoa said that demand will rise, and now FCX hints that demand is picking up. So who is right? Copper is demanded by anything that has to do with electricity. So if construction goes up, then copper demand goes up. I believe there should be a link between copper and steel demand. It is odd that only copper is rallying, due to the apparent shortage next year. However, this shortage has been accounted for by the CHinese government who has already stocked up more than 300k tons of copper.

I think buying some FCX DEC PUTS $90 is the safest trade here. This is to trade the downside risk that FCX has now.