CPER (Copper) Weekly Chart; Rising Wedge; Overbot; Negative Divergence

Doctor Copper, we hardly knew ye. The AI boom has traders buying copper with both fists since the red metal is needed for wiring, electrical and piping systems and motors. At the same time, there has been a few supply disruptions due to weather and unrest. It is all priced into copper now.

The standard relationship for decades was housing, autos and copper. The big users of copper are houses that need plumbing and automobiles. When these two industries would slip into recession, there was Hell to pay. The US would go into recession and copper would be shunned. AI is the new dog in town and copper fever reaches a crescendo now with everybody and his bro invested on the long side. Perry Poindexter, that runs the tailor shop in town, and typically plays it safe, instead placed his entire life savings into copper futures on the advice of his new broker, Charlie Chisler.

The red rising wedge is a bearish pattern and very impressive that it took a couple years to develop. The collapses from rising wedges can be quite dramatic. There is a long way to fall if price loses the bottom rail of the wedge. 

The red lines show the negative divergence across all indicators. Price moved higher but all indicators are out of gas sloping lower; neggie d. Thus, mathematicians say thus a lot, that is why Keystone was asked to give his door card back at the Moose Lodge, price should receive a multi-week slap down going forward. Price already slumps to the lower rail so it will be a big deal when it gives way. The red rock may fall like a, rock.

The standard deviation bands have come in tight (purple arrows) that means a big move is coming but it does not forecast direction. The neggie d says down. The prior tight bands squeezed out higher moves as copper was in its upside orgy phase. Copper may put on quite a show over the next few weeks. Stay away from it.

Of course, copper is a bellwether for the entire economy. It is not good if Dr Copper is lying on a gurney getting wheeled into the emergency room. 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.