Copper

The futures ended the week just a hair shy of triggering a 'mechanical' short at the green line (x=5.9093).  Because it would require an initial stop-loss just above C=6.1150, I am recommending the trade only to those of you who are familiar with small-interval (i.e., 'camouflage') triggers. (They are covered in the Hidden Pivot Course that is available free to most subscribers.)  The trade is predicated on a price objective at 5.2920, the 'D' target of this conventional pattern.  That implies it should be good for at least a one-level ride from x to p=5.7035, but anything lower than that would indicate more slippage to at least p2=5.4978.  ________ UPDATE (Feb 9, 11:14 a.m.): See Monday night’s chat room discussion for further guidance.

Copper's correction exceeded the midpoint Hidden Pivot support of a pattern I've partially concealed.  The overshoot is not sufficient to infer that more slippage to d=5.0095 is a done deal. However, a bounce to the green line (x=6.1896) would set up a moderately attractive 'mechanical' short, stop 6.5830, that presumably would be good for a one-level ride back down to p.  If a rally from the green line comes from further below p, that would sweeten the odds for shorts initiated at x.

Copper and a rotating selection of popular symbols  will be replacing Bitcoin on this page, although I will continue to provide timely analysis for Bitcoin on demand in the chat room.  The chart shows how copper's price has tripled since bottoming just beneath $2 a pound in March 2020, when covid fears seized the world's machinery. 'Doc' Copper has seemingly done its job since in predicting an upswing in global industrial activity.  In particular, it included a surge in demand caused by a worldwide push toward renewable energy and electric vehicles, which require a lot of copper for batteries, charging infrastructure and renewable energy systems. However, copper's ascent has nearly reached a hard target at 6.18 a pound that suggests the bull market may have run its course. Does that mean a global recession-or-worse looms? We will not likely know until a recession is well under way. It is coming eventually, but in the meantime, a bull market that has been galloping along for 16 years should command our respect, if not our unquestioning confidence. If an important top is in at 6.1540 (basis the March contract), it would be corroborated by a pullback that decisively exceeds 5.36. A somewhat higher top would require an adjustment in that number, a Hidden Pivot, so stay tuned.

[Note:  I've changed the core list of touts, adding some futures contracts in order to provide more tradable opportunities. The new selections will vary from week to week.  RA ]  There are no sure things in the trading world, but the possibilities in the Copper contract shown in the chart look quite enticing. This pattern has already paid off twice with a 'conventional' buy at the green line (x=4.4079), and a 'mechanical' buy on the pullback to the red line (p=4.6983). It can still be milked for two additional trades: 1) a 'long' to d=5.2790; and ) a short when d=5.2790 is achieved (which looks like a foregone conclusion). The latter trade is the more promising, since the chart holds out the possibility of an important top at or near the target. ______ UPDATE (Jul 4): The futures made scant headway last week toward the 5.2790 target noted above. Short there with a tight stop-loss if you've held a long position that made money on the way up. The target is the 'd' terminus of a large 'reverse' pattern begun last winter, so a reversal there could conceivably be an important one, and you should treat it as such.  Here's the chart. _______ UPDATE (Jul 11) Trump's latest tariff threat spiked the price of copper by nearly $1.00 per pound in a single day, blowing past my 5.2790 rally target with ease. I'd suggested shorting there only to subscribers who were long on the way up, but the extreme volatility of the move could have produced results that varied significantly. I'd be interesting in hearing from those who did the trade, since it will sharpen my ability to tailor trades to suit your needs and your appetite for risk.

With 'Doc' Copper tiptoeing higher, we should prepare for a possible opportunity to short the July contract 'mechanically' if and when the futures get to the green line (x=4.026). The week ended on a downstroke that would require a last-gasp rally to reach our goal. This is a potential $65,000 winner on four contracts, with commensurate entry risk, so we would want to initiate the trade with a 'camouflage' trigger capable of drastically shrinking the initial exposure. I have no indication that subscribers trade this vehicle, but please let me know in the chat room if you're interested. _______ UPDATE (Jun 28, 5:56 p.m.): The shorting opportunity is past, since the futures have sold off hard since narrowly missing our offer. The 2.956 downside target noted here earlier remains in play. 

July Copper's breach in late May of the 3.65 midpoint Hidden Pivot support shown (see inset) is bearish and hints of a further drop to as low as D=2.95. A corrective rally to the green line (x=4.00) would set up an opportune 'mechanical' short, but failing that, the most promising swing trade we could envision on the middle horizon would be bottom-fishing at p2=3.30. If that were to occur, the energy sector would undoubtedly experience a corresponding drop that in turn would imply an easing of inflationary pressures and a positive impact on mining stocks. Please note that this is 'Doc' Copper's first appearance on the touts list in a very long time, and it is intended to supplement and confirm my analysis of crude, which is also in a secular downtrend.

We looked at Copper during today's tutorial session and came up with a 2.0380 downside target that I'd expected to take weeks to reach.  Instead, the May futures went into a power dive that came within less than two cents of the target in mere hours. I'd suggested bottom-fishing there and rated the trade an 8.8, meaning it's about as juicy as they come. But the steepness of the plunge brought with it a heightened sense of the risk involved, so I will recommend the trade only to those of you who understand why it amounts to nearly $1800 per contract initially, if using a=260.50 (from weekly continuous chart, where a= 260.50 on 12/16/19). The entry trigger would come at 212.53 for a shot at p=219.55._____ UPDATE (Mar 19, 6:42 p.m.):  Off a 197.25 low, the trade triggered at 199.45. Numerous subscribers reported getting aboard for what turned out to be a steep, exhilarating ride. Based on a so-far high at 291.50, this gambit could have produced a profit of as much as $5012 per contract.

I haven't looked at 'doc' copper in a while, but a bullish note posted by Seees37 in the Saloon made me curious about the long-term chart. It is indeed bullish and has been so since 2016, mainly because of the robust impulse legs that have been occurring regularly since. Every major upthrust has exceeded a significant prior peak, and that is usually a good indication that the trend will continue. There have been some minor, bearish impulse legs along the way, but none as strong as the bullish ones. If copper prices are in fact headed higher, that would imply the economies of China and Germany are about to get second wind and that recession talk in the U.S. is premature. This is far from a given, however, since it wouldn't take much weakness to diminish the bullish look of the weekly chart shown. A dip beneath 2017's lows near $2.45/pound would suffice. That would also crystallize the bearish head-and-shoulders pattern that has traced out since late 2016. I usually don't pay much attention to these formations because they are everywhere one wants to see them.  In this case, however, the pattern is such a textbook beauty that we ought not ignore it. For an illuminating discussion of head-and-shoulder patterns, visit the Coffee House and Saloon, where some subscribers have weighed in most insightfully Sunday morning on the topic. _______ UPDATE (Jan 28, 4:28 p.m. ET): The recent thrust pushed above three prior peaks (click here for chart), suggesting that any weakness will be corrective, prelude to another bull leg.

No chart troubles me more than Copper's, since it implies so clearly that the global economy is doing fine and will continue to expand, even if only moderately, for the foreseeable future. That's the kind of bilge we expect to read on the front page of the Wall Street Journal, the most enthusiastic cheerleader for the charlatans and economic dolts who run the Federal Reserve. And yet, it's hard to argue with the bullish look of this chart, or with copper's known prescience in predicting economic strength, particularly in the manufacturing sector. Under the circumstances, I can offer only a forecast of clear sailing to at least 3.6328, a midpoint Hidden Pivot associated with a bull-market target at 5.3300 (!)  If copper prices are indeed on their way to such heights, then forecasts that the Dow will ultimately hit 30,000 are not so farfetched as we permabears might wish t0 imagine.