Monday, June 24, 2013

Copper Weekly Chart Sideways Symmetrical Triangle Breakdown and Potential Descending Triangle Breakdown

Copper is in bad shape these days due to the slower global economy especially China. The blue sideways symmetrical triangle shows the price failure out the bottom trend line at 3.50-ish in February 2013. The vertical side of the blue triangle is about two ticks, so the downside target is a troublesome 1.50-ish (3.5-2.0) at the lows from early 2009 when all this quantitative easing madness began. The red descending triangle has a base line at 3.00 which must hold, otherwise, bad stuff is unleashed to the downside. Keystone's 80/20 rule says 2's typically lead to 8's so the rupture of 3.20 hints that 2.80 may be on the way. If the 3.00 level fails, the red triangle targets the 1.50-ish area as well (3.00-1.5).

With China on the skids, the interesting aspect is how copper was used as collateral for loans for the obscene building bubble. Perhaps the warehouses full of copper all across China will be exposed and the realization of the large supply may become apparent? The chart is scary. The sideways triangle has already set the downside in motion; a failure at 3.00 likely seals copper's fate for lower prices. Dr. Copper has signaled global economic trouble since February but the central banker money-pumping, mainly the BOJ this year, has negated the fundamental effects of the economy creating higher equity markets despite copper saying otherwise. Perhaps the chickens are coming home to roost. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

1 comment:

  1. times are becoming scary real quickly. things are unraveling faster than i'd expected, let's see if the markets can stay irrational much longer or if the great unwind has actually started?!


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