COPPER Weekly Chart

Copper is rocket launching to the moon with parabolic price movement. The other yellow metal has catapulted from 2 to 3, +50%, in only 16 weeks; a phenomenal move. Copper, an industrial metal, even outshines the gold and silver precious metals these days. Traders like silver since it checks both the industrial and precious boxes.

The mining operations in Chile and Peru, that produce the world's copper, are stricken with coronavirus outbreaks. Miners are sick as dogs sitting at home instead of placing copper ore on rail cars. At the same time, most global market players are buying into the V recovery theme and believe that the US, China and the world will bounce back stronger each week forward. What are they smoking? Time will tell. Nonetheless, perceptions are all that matters in trading not truth. Thus, Doctor Copper, that was sick laying on the gurney all of this year into March, leaps off the table, pulls the IV's from his arm and declares that he has made a masterful recovery waving the double-whammy banner of joy (virus hitting Chile hard hurting supply and a belief that demand will increase strongly in a recovering economy).

Copper price takes out the high at the start of the year which shows continued strength. Keystone's 80/20 Rule says 8's lead to 2's so the breach above 2.80 will likely lead to 3.20. The 2.88 will likely lead to 3.92. Copper currently trades up a big 0.05 to 2.95 tacking on another +2%. A breach of 2.98 will hint that 3.02 is on tap. Copper is shining so bright that you have to wear shades.

The chart indicators are long and strong and considering the momentum, copper has a bit more room to run. The 3.00-3.20 is a realistic target zone. The RSI and stochastics are overbot so price needs to take a rest. Note the negative divergence with money flow that will also create a pullback for the metal to rest.

After a few days or week or so of softness, copper will come up again for more new highs. The histogram, MACD and RSI remain long and strong so it will likely take a couple jog moves, on the weekly basis, to turn over. Thus, down for a week, then back up for a week or so, then down again for a week or so, then back up for another new high when the MACD line may turn neggie d and identify the top on the weekly basis, so if things remain the same copper would be expected to top out in 3 to 5 weeks.

The ADX is at 27 but needs to be above 30 heading higher to prove that the rally is a strong trend higher, so far it is not. The strong trend was the drop in copper during the beginning of the year. The ADX sniffs-out the fact that copper price is driven higher more on hype currently. The Aroon positive cross occurs verifying the move higher in copper.

Interestingly, Chile is much at the center of this copper pop. Will looking at the coronavirus charts help forecast the move in copper? Perhaps. In other words, since miners are dropping like flies with the virus sending copper higher due to supply constraints, copper should sell off hard as soon as the miners are on the mend, eating chicken soup, and planning to go back to work the next day.

Keystone will be updating the coronavirus series of articles this week with Article 13 on tap which will line up the countries and states from bad to worse as usual. What does Chile look like? The Worldometer site has Chile ranked number 6 in total cases around the world; that is not good. Holy smokes! Peru is number 5. Ay carumba! No wonder copper is going through the roof. All the miners are at home or in the hospital puking into buckets instead of mining copper ore.

For Peru, their New Case Peak High is 5/31/20 so adding 28 days as per the Keystone Model, the Active Case Peak, which reflects the bell curve and maximum strain on the medical system (where the bell curve is flattening out and will begin to drop off), is 6/28/20 and Peru peaked out with active cases before that on 6/14/20. Thus, Peru is headed in the right direction although the active case curve is worrisome since the descent is leveling off.

For Chile, their New Case Peak Date is 6/14/20 so the peak in the active cases bell curve chart would be expected on 7/12/20, yesterday. Chile's active cases chart shows a peak occurring before the new case peak so the data is flawed. New cases may be starting to level off for both nations which is not good; they need the new cases to keep dropping. The charts are of no help in forecasting copper although the active cases chart should be monitored for both countries where it shows a leveling off for the last few days. If those charts move higher, copper will likely take off even higher. If the active cases curve continue their sideways to sideways lower move, the copper supply situation will slowly resolve itself. These are interesting times. Keystone holds no position long or short in copper since it is a Crazy Train ride. Note the big moves in Southern and the miners (SCCO and COPX). 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.