Tuesday, October 8, 2013

JJC Copper Sideways Symmetrical Triangles Potential Bull Flag

Copper is the life preserver for bulls the last few days. Market bears cannot gain significant downside since copper is gaining strength. The chart is truly remarkable showing the top in copper in February, which led to a broad commodity sell off this year. The SPX would be expected to be 200 handles lower with the multi-month copper weakness, instead, the SPX is over 200 handles higher this year. No further proof is needed to illustrate the power of the Fed and other central bankers this year, especially the BOJ pumping which carried equity markets the first one-half of the year and the weaker yen single-handedly prevented the commodities from causing equity market failure. Equities are pumped on easy money crack cocaine.

Copper is keeping equities elevated. Keybot the Quant, Keystone's trading algorithm, identifies 40.19 (neon blue line) as the bull-bear line in the sand. Market bulls win above JJC 40.19 and bears win below 40.19. The breakout from this sideways price action is very important. The hash marks in the right margin shows various targets based on the blue and brown symmetrical triangles. If bulls break out above 40.50-41.00, price should seek 44-47. If bears break below 39.50-40.00, price should seek 33-36. The purple bull flag is in play but it printed a sloppy first leg in July and early August so the pattern may not have much validity. Use the RSI and stochastics 50% levels as a key indicator on direction. As copper goes, so goes the markets. The chart is not tipping its hand. Watch for the move through the triangle trend lines to identify the winner. 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.

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