Dr. Copper is sick ( $COPPER $DBB )

Quick Recap
January 2016:  In the midst of a Global Deflationary Spiral,  the commodity index $CRB was below support that had been in place since 1973.  Oil was trading sub-$30 and Copper was at post crisis lows of around $2/lb.
June 2018: In the last 30months the $CRB has bounced from 155 to 200.  Not really very much despite oil’s recent run.  Copper surged from $2 to $3.31. 

Copper falls 11% in 3 weeks

Since June 11, Copper has fallen 11%. Today July 5, Copper futures indicate its off another 1.5%. From the chart below we can see price at key support at  $2.875.  It’s gotta hold here. On a measured move basis from the double top, price is projected to move into the low $2.60 area; another 11% lower from here if this last bit of support is broken.

The Monthly chart of Copper shows a darker picture.  Price retraced 50% from the 2011 high of $4.60ish but is now rolling over.  In my experience these big sweeping trend changes on a monthly chart are so important. They just don’t turn on a dime.  I think copper goes much lower.
The tradeable ETN for Copper is JJCTF

It’s not just Copper – Look at Base Metals ($DBB)

Below is a weekly chart of the base metals ETF   $DBB.  You can clearly see price dropping out of the rising uptrend channel that has been in place since January 2016. Going lower from here.

Final Thoughts

I am bearish on commodities  near-term. Aside from a fairly productive chart on oil, everything else is pointing down.  Is it all trade talk related?  No idea.   I just don’t see any bullish charts.   I am curious about the meager bounce over all.  Is demand that tepid or has over-supply simply swamped the system?

Keep an eye on this stuff. They call it Dr. Copper for a reason.  Its often a precursor / canary in the coal mine for other markets.  Let’s see what the summer brings.

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