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.

Spread the word?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *

Let's do this.

Subscribe to the Daily Profit Compass now. It’s 100% FREE.

Website powered by RapidWebLaunch