The title is just an excuse to reference an old market saying about copper as the metal with a Ph.D. in Economics. I think that is just so much noise now as is much of the macro market, with all of its man-made stimulants creating a toxic pool of assets sloshing around the globe; copper included. I’d say the actual Ph.D. is the stodgy old man, gold. He of the counter-cyclical indications.
For whatever reason copper is still watched closely by multitudes of casino patrons and here is the state of its daily chart. Utterly bombed out to an oversold situation right to the level of my excellent, genius and utterly “fantastic” call… that was unfortunately only made to one person (i.e. it was not a call, just an offhand remark to a pal).
July 3rd in response to an inquiry from IKN’s excellent mining funda guy, Mark.
“Support @ 2.70. Could see a drop, shakeout/whipsaw and bounce back scenario.”
Now where to? By “bounce back scenario” I don’t mean bullish, I mean bounce from a higher low to the 2017 low. The weekly chart shows the support level as referenced above. I would not be at all surprised by a bounce. But copper can ultimately drop a long long way while still keeping a terribly volatile uptrend from early 2016’s launch of the entire inflation trade intact. RSI is oversold but can get more so.
The monthly chart gives me the opportunity to balance out the the 2.70 call above with a call that did not work out. I had thought – and written publicly – that the resistance at $3/lb. was going to be near impenetrable. Well, the good Doctor spent 3 full months and parts of 7 others above it before ultimately failing this month. So insert here yet another warning about men who stare at charts; they see all kinds of things, but even if they are ultimately right the market goes on its own time and kills the analysis by shear endurance. MACD is triggering down and RSI sucks. Copper is bearish.
Now of course monthly charts are so sloth-like and a lot is going to happen in the interim as bounces, failures, spike rallies and death defying plunges come about. All the while the media and the Bull in the China shop will be bullhorning, jawboning and breaking things.
The monthly chart tunes all that out but you may well lose your mind in the interim with the cacophony on the shorter time frames. In a way, it’s what makes markets fun because it gives us the opportunity to always review options for perspective and frame of reference at any given hysterical point. Okay, now I am getting a little weird so lets end the post here.
Doctor Copper prescribes bearish, but with a lot of cross talk and whipsaw likely to come.
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