Saturday, March 8, 2014

COPPER Daily Chart Mini-Crash Event Collapsing -4.3%

Doctor Copper is in sick bay but no one pays attention. Copper is a key indicator since it provides a direct measure of the housing and auto industries. The average car contains about 50 pounds of copper and average house about 400 pounds of copper. A strong move higher with copper indicates a strong robust economy where the housing and automobile sectors are running on all cylinders which will create jobs and an all around successful path ahead. Weak copper indicates a sick stagnant economy with housing and automobile sectors slowing down. Weak copper creates a deflationary outcome. In recent years, composite materials and aluminum have been taking a small amount of market share from the doctor but copper will always rule the roost.

The bullish euphoria is rampant in markets with traders now saying SPX 1900 and higher is guaranteed; maybe next week. The -4.3% collapse in copper paints a different picture. Price collapsed down through support levels with no sign of support in sight. Copper will likely stagger around at the current levels to get its bearings. The thin brown lines display a sideways triangle with the vertical side in November of about 0.17 so the collapse from the lower triangle trend line at 3.21 targets 3.04. Sick copper means a sick economy but everyone continues partying like its 1999. 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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