Copper is a fairly strong measure of the strength and capacity of the global economy and global manufacturing. Right now, Copper has been under quite a bit of pricing pressure and has fallen from levels above $4.50 (near 2011) to levels near $2.55. Most recently, Copper has rotated higher to levels near $3.25 after President Trump was elected on November 2016, yet has recently fallen as trade and global economic concerns become more intense.
For skilled technical traders, this should
be viewed as a strong warning sign that institutional traders and investors are
very concerned that the future economic and manufacturing activities throughout
the world are continuing to contract.
Copper is used in various forms throughout all types of manufacturing
and consumer products, such as computers, building & infrastructure,
electronics, chemical & medical use as well as automobile and aircraft
manufacturing. It makes sense that
copper prices would be a leading indicator for much of the global economy and
relate to economic output and capacity.
As the US/China trade war continues and we enter the final stretch of the US Presidential election cycle, we believe that copper will breakdown below the $2.50 level and attempt to identify past support levels below slightly $1.50 over the next 6 to 12+ months. We believe the next big move in commodities will be a contraction move where certain commodities (mostly manufacturing & industrial related) will collapse as the world focuses on two of the most important events that are about to conclude in 16+ months: the US Presidential elections and the Global Trade/Economic issues.
The breakdown in commodity prices as related
to slower expectations and global economic demand may see a dramatic downside
move or may see a more measured “slide” towards the $1.45 level (much like what
we saw happen between 2013 and 2016).
Overall, though, we believe the downside price move outweighs the upside
at this time – unless some type of dramatic resolution to the US/China trade
issues and global economic slowdown are ended.
We’ve also highlighted an extended long-term
Pennant/Flag formation in Copper that should provide further insight as to the
range of price rotation before the bigger breakdown in price occurs. This pennant formation will likely contain
the immediate price range/rotation over the next few months to between $2.30 to
$3.00. Should price break below the $2.25
level within the next 2~6+ months, then we would expect an immediate downside
move towards the $1.50 level.
CONCLUDING THOUGHTS:
Following the core commodities as related to
global economic and manufacturing demand and capacity are key elements to
understanding how traders and investors are viewing the future expectations for
the global markets. Commodities like
Copper, Gold, Silver, Oil, Natural Gas and others can often be leading
indicators related to global economic output and expectations. We urge all traders to prepare for a broader
market contraction event over the next 6 to 12+ months based on our research
that suggests Copper is setting up for a breakdown move.
These global market price swings in 2019 and
2020 are going to be huge events that will present incredible opportunities for
skilled technical traders. You don’t
want to miss out on the opportunity these types of big moves present.
Following the core commodities as related to global economic and manufacturing demand and capacity are key elements to understanding how traders and investors are viewing the future expectations for the global markets. Commodities like Copper, Gold, Silver, Oil, Natural Gas, and others can often be leading indicators related to global economic output and expectations. We urge all traders to prepare for a broader market contraction event over the next 6 to 12+ months based on our research that suggests Copper is setting up for a breakdown move.
These global market price swings in 2019 and
2020 are going to be huge events that will present incredible opportunities for
skilled technical traders. You don’t
want to miss out on the opportunity these types of big moves present.
Recently warning that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.
I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.
On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.
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