Copper Weekly Chart; Overbot; Negative Divergence Developing; Upper Band Violation

Doctor Copper had covid earlier this year tumbling from 2.90 to sub 2 a -31% crash. At the same time, the broad US stock market plummeted -38% the fastest crash in history. Then the Federal Reserve rides in on its pale green horse promising easy money for as far as the eye can see. Dollars begin falling from the sky like snowflakes. The US government then provides fiscal stimulus goodies that increase the currency blizzard. Other nations are also printing money like mad each trying to out-goose the other's economies.

The four central banker horseman of the financial Apocalypse, the Fed, BOJ, ECB and PBOC, proclaim throughout the world that stocks will never be allowed to move lower again. The March rally begins. The world is awash in liquidity. The easy money dough will be used on many projects, including boondoggles, and copper is a big beneficiary. Copper's two big users are homes (pipes, wires and appliances) and vehicles (wires and electrical systems).

Doctor Copper, who holds a PhD on the economy, jumps off the gurney in late March, rips out the IV, and proclaims he has defeated the virus and plans to rally strongly higher on central banker easy money, and off he goes. The rally runs from 2 to 3, +50%, off the bottom creating the V recovery. Copper bumps its head on that long-term resistance at 2.90-3.00 and retreats slightly. Doc Copper sits down on the curb and says he may be starting to feel ill again. Last Friday he puked -4% and on the week he up-chucked -2.6%. This weekend he is in bed with a hot water bag on his head. Copper is worried that he may be too weak to carry the stock market forward.

Copper violates the lower band in March and bingo, flies up to the middle band and then continues higher to touch the upper band, band to band, that is a weight off copper's mind courtesy of the band, but now the middle band at 2.54, and rising is in play, as well as the lower band at 2.05. Copper is up over +2% in the pre-market; the bulls know the red metal must be kept buoyant to keep the stock market buoyant.

Price respected that purple sideways channel for a year and one-half but that failed this year during the stock market crash. It would be reasonable to think that price will seek that lower purple rail again in the weeks ahead at 2.60-ish. The RSI and stochastics are overbot agreeable to a pullback ahead.

The red lines show negative divergence across all indicators as price made a matching high, except for the MACD line. Thus, on the weekly basis, copper likely wants to come back up one more time. At that time, the MACD will go neggie d and the top will be in on the weekly basis for Doc Copper. The 200-day MA at 2.76 is key support and more serious trouble begins if it fails.

Copper has a few more days of life left but after that, when the MACD goes neggie d, the top is in and a multi-week slide lower begins. This is lining up with the broad stock market that is topping out with negative divergence across multiple time frames and traders and investors that are complacent, giddy and euphorically bullish. 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.