Copper Daily Chart Sideways Symmetrical Triangles

The 3% copper collapse is a big deal yesterday but no one noticed. The red triangle shows the ongoing fight to maintain the lower rail support but that failed in a big way yesterday. The blue triangle shows how price had already failed its lower rail, and back kissed the lower rail and the 200-day MA, only to collapse. Usually there is a fake out move with the triangles as shown by the blue circle where price then returns into the triangle and moves out the other side, in this case, falling out the bottom.The selling volume is strong. The 20-day MA is under the 50 which is bearish. Price has lost the 200-day MA, bearish. Watch to see if the famed death cross occurs in the weeks ahead with the 50-day MA through the 200.

About 400 pounds of copper is used for a new house and about 40 pounds of copper go into a new car. The European automobile sales receive more bad news this morning and the manufacturers are lowering their ongoing sales estimates for 2013. Auto's benefited from the Hurricane Sandy tragedy since thousands of vehicles required replacement. That bump is over. Traders in general are relying on the housing sector recovery. It is the main linchpin holding the economy together.  The retail and semiconductor sectors appear to be rolling over so the housing sector must remain strong.  The foreclosure log jam, where it takes almost three years to move through the foreclosure process, is lifting and a flood of properties should now hit the market. Builders have rushed in to fill the void of a housing inventory that was falling, but this was due in a large part to the governmental intervention causing the legal log jams. It will be interesting as the inventory grows to see if the housing recovery enthusiasm can continue, or not.  This morning the most important data point this week hits with Housing Starts at 8:30 AM. The importance of starts cannot be understated and a wild reaction in the futures is anticipated.

The copper collapse is a signal of bad times ahead. If Dr. Copper is sick, so is the global economy. However, the equity markets defy copper's lead and continue to march higher instead. One of them is wrong. The housing sector will likely determine which one. Copper is down today in early trading. 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.