Tag Archives: copper

Expensive Copper

By Steve Saville

Considering the overall commodity backdrop, the recent sharp rebounds in base metal prices and the copper price in particular are both interesting and incongruous.

Under the heading “Copper Bottom” in a TSI commentary a few days ago I discussed last week’s upward reversals in the copper price and the Industrial Metals Index (GYX). I assumed, at the time, that last week’s price gains were partly due to the risk that supply would be disrupted by the blockade of Freeport’s massive Grasberg copper mine in Indonesia, and therefore that the removal of this risk at the end of last week would result in some of the price gains being given back this week. Strangely, however, the copper price spiked higher at the beginning of this week and briefly challenged the bottom of the major $2.90-$3.00 resistance range before pulling back to the high-$2.70s (a few cents above last week’s closing level). It seems that games are being played by large-scale participants in this market.

I plan to write some more about copper later this week at TSI, but at this time I wanted to point out that the bearish participants in the copper market have relative valuation on their side. As illustrated by the following charts, the copper price is presently at a multi-decade high relative to the CRB Index and at its highest level since 1998 relative to oil.

copper

Doctor Copper

By Biiwii

Wow, look at the big rally in Copper (hourly)…

copper1

Wow, look at the resistance coming up (monthly)…

copper2

It’s all in how you want to cherry pick time frames.

The monthly chart says it’s all just noise until Copper clears 3 bucks a lb.

Key Market Update – Metals

By Ino.com

metalsApril gold was lower overnight as it extends the decline off January’s high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If April extends the aforementioned decline, the 62% retracement level of the November-January-rally crossing at 1199.50 is the next downside target. Closes above the 20-day moving average crossing at 1257.00 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 1231.80. Second resistance is the 20-day moving average crossing at 1257.00. First support is the 62% retracement level of the November-January-rally crossing at 1199.50. Second support is the 75% retracement level of the November-January-rally crossing at 1176.10.

March silver was slightly higher overnight as it consolidates some of Tuesday’s decline. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off January’s high, the reaction low crossing at 16.210 is the next downside target. Closes above the 20-day moving average crossing at 17.323 are needed to confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 17.323. Second resistance is January’s high crossing at 18.505. First support is the reaction low crossing at 16.210. Second support is the reaction low crossing at 15.510.

March copper was mostly steady in quiet trading overnight. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 255.05 would temper the near-term friendly outlook. If March extends the rally off January’s low, the reaction high crossing at 279.40 is the next upside target. First resistance is the reaction high crossing at 264.20. Second resistance is the reaction high crossing at 279.40. First support is the 20-day moving average crossing at 255.05. Second support is January’s low crossing at 241.90.

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[edit]  Might as well add in some of our own $.02 on the yield curve, S&P 500 and gold…  Risk ‘ON’  –NFTRH

 

Doctor Copper Catches Pneumonia

Guest Post by Bill Fleckenstein @ Stealflation

Following its recent decline, at this moment copper is following oil’s path lower, along with many other commodities as well. Whether it turns out copper has been undermined by the same phenomenon as oil — i.e., misallocated capital — we won’t know for a while, but what is clear is that the signals emanating from financial markets are grossly distorted because of the absolutely extraordinary amount of money that’s been printed by the U.S. and other central banks in the last group of years. 

The crosscurrents and potential for whipsaws in many of these markets is absolutely extraordinary, and at times it can be rather confusing as to what, if anything, the markets are trying to tell us. Regretfully, I think much of it is noise caused by all the printed money, but not all of it, and ferreting out the difference between the two is going to be important — and tricky. 

Like a Cartoon Cliffhanger: Just Don’t Look Down

One thing I am absolutely certain of, there is no way the stock market can hold together in the absence of QE and the presence of the weakness in the world economy that we already know about, much less the as-yet-unknown consequences that the break in oil, copper, and credit markets might inspire. 

It is actually remarkable that the stock market has held up as well as it has thus far, and on every day that it looks ugly it seems many people are still eager to buy the dip. Perhaps that isn’t terribly surprising given the fact that the last six years have essentially been straight up, with very little angst (certainly the last couple of years have had very little), so at the moment there doesn’t seem to be much fear among U.S. stock investors, even given the long and mounting list of things that could potentially go wrong. For the time being, the prior price action and momentum seems to carry the day, though that does appear to be changing.

 FX: Like a Beauty Pageant for Warthogs

Parenthetically, I firmly believe that the dollar is on borrowed time. It is where it is simply thanks to the stock market soaring on the back of easy money, which caused people to believe that the economy is stronger than it is and that the Fed will be raising rates. The problem is, other colored pieces of paper all have their own warts. 

However, I think expectations are so high for the dollar, and positions are so huge, that trouble is inevitable. As big a hunk of junk as the euro is, when the ECB starts QE, the euro may (perversely) rally. In any case, I’m not really doing much regarding the dollar because if it does weaken, precious metals will quite likely do very well. 

Yield Sign Translation: Do Not Enter!

With the U.S. 30-year bond making a new low in yield of around 2.40%, the bond markets continue to be the epicenter of distorted prices, thanks to what the central banks have done. But that has been the case for some time and doesn’t mean it will change soon. In the short run, weakness in stocks or bonds will likely cause even more bond buying, but the bond market is going to be the scene of the accident of a lifetime at some point, even if that appears to be several steps ahead of us still.

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  • GDX vs. SPY; Different This Time  –NFTRH  [biiwii comment: what is different is that the main gold sector hype has been how deflation is going to destroy gold stocks; Ukraine was so summer of 2014]
  • What, Us Worry?  Economists Stay Upbeat as Markets See Trouble  –Bloomberg  [biiwii comment: look, things may indeed be fine for now; the forward data will tell the story. but how many mainstream economists saw the bubble top in 2000, the credit bubble, housing bubble and the coming liquidations of all manner of leveraged excess in 2008?  answer… see no evil, hear no evil, speak no evil…]

 

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  • MBS & MBS  –Across the Curve  [biiwii comment:  some pretty cool play-by-play]

 

Bottom for Copper

Guest Post by Tom McClellan

Chart Data Show a Bottom for Copper

Copper COT Data
October 10, 2014

Last week I pointed out how the Commitment of Traders (COT) Report data for currencies were pointing to a big topping condition for the dollar.  That top appears to have arrived, and if the dollar heads downward then that should provide a boost to prices for all sorts of commodities.

Continue reading Bottom for Copper

Doctor Copper Updated

Copper is a tough one.  If copper hangs in and hints at an ‘inflation trade’ (i.e. anti-USD) bounce to come, I’d like to buy COPX or FCX.  The charts are coming along nicely.  COPX was NFTRH+’d recently for just such an occasion.

The weekly chart of copper is trying to hold above a downtrend breakout line and hold a trend out of March.

copper

But the monthly chart is still disgusting, a year or so after it was created…

Continue reading Doctor Copper Updated

Morning Market Report; Metals

Guest Post by Ino.com

Metals Snapshot
Symbol Last Change %
GOLD Dec 2014 1285.8 +0.6 +0.05%
SPDR GOLD SHARES 123.3501 +0.6101 +0.49%
SILVER Dec 2014 19.455 -0.004 -0.02%
PALLADIUM Dec 2014 888.50 -1.65 -0.19%
DIREXION DAILY GOLD MINERS BEA 16.10 -1.11 -6.90%
POWERSHARES DB PRECIOUS METALS 40.992 +0.192 +0.47%

Gold, Silver & Copper

Continue reading Morning Market Report; Metals

NFTRH+; Copper Miners Setup

With Copper rising above the converged 50 and 200 day SMA’s (around 3.18/lb) and with commodities in general at do-or-die support, I wanted to put up a chart of COPX for future reference for you copper/base metals aficionados.

Continue reading NFTRH+; Copper Miners Setup