Copper Weekly Chart H&S 20% Drop Confirms Bear Market

Copper weekly chart we have studied and watched over the last few weeks shows the H&S pattern playing out as projected, hitting the 3.4 target smack dab on. The drop from 4.6-ish to 3.45 is 25% five percentage points more than the bear market threshold of 20%. Note that a juicy gap fill is also needed in this area from August 2010. The money flow, stochastics and MACD histogram are all agreeable to a bounce off this targeted H&S level now, but, as shown by the RSI, future lower prices are in store overall.  The daily chart shows that positive divergence remains in place, so a relief bounce would be in order for the short term.

Keystone called for a copper collapse this year and that waterfall red candle is telling. The 200 week MA provides support on the underside at 3.22. For now, copper is setting up for a relief bounce but lower numbers are expected in the weeks and months ahead as the global economy continues to falter and China's bubble pops. The extent of inventory hoarding will now become apparent for copper. The additional headache for China is that copper was being used as collateral for real estate loans over the last couple years. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or on any of the links to or from this site. Consult your finanical advisor before making any investment decision.