Copper Weekly Chart Sideways Triangle Receiving Large QE Bounce

Copper shows a long term sideways symmetrical triangle with copper breaking out to the upside now just shy of 3.69, the green dot. The neon green channel is now in play. The indicators are all long and strong wanting to see a higher high after a pull back occurs. Copper leads the markets and it had been lagging until Draghi's stimulus talk, folllowed by China's infrastructure program on Friday, and now today on more anticipation of central banker quantitative easing.  The money pumping sends commodities and equities markets higher. The buoyancy in copper, however, is not in line with a market that is about to pull back strongly. Thus, Bernanke's decision is very important since it will send copper either violently up, or violently down.

Price should back kiss the top rail of the triangle at 3.60-3.65 now that it broke up thru. The blue box shows the effect of the LTRO 1 and 2 money pumping that began last Fall and created the market rally earlier this year.  As soon as the crack cocaine is delivered, copper catapults higher, like an addict taking a hit.  The 3.90 level is very important resistance.  The question now is how much bang for the buck does copper receive off the Draghi/China/Bernanke pump? Draghi showed his hand last Thursday, very copper friendly, likewise the China infrastructure program, and Bernanke is on deck for this week. Bernanke will either hit a home run, copper higher, or strike out, copper lower.

If bears want to reverse this bullish signal for markets, a hard price move down would be needed, and one of the only circumstances for that would be Bernanke delivering disappointment. Copper is the makret leader; it carries a lot of clout, so study its movement over the coming days and weeks. 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.

Note Added 9/10/12 at 4:07 PM:  Copper is 3.6715.