Copper

If the futures close beneath this week's 2.9855 so-far low, expect further slippage to at least 2.9765, the next Hidden Pivot support in the sequence shown. Camouflageurs keen on bottom-fishing should look for an entry spot on charts of minute degree or less. Notice that the highest possible 'A' here -- a one-off, in this case -- implies a bear market low at 2.6955, a 9.4% fall from these levels. ______ UPDATE (July 1, 2:00 a.m. EDT):  The support noted above has held so far, but if the rally is the real McCoy it should be able to at least equal the 3.235 D target of (60-min) A=2.9855 (6/25); B=3.0935 (6/25); C=3.0155 (6/27).  _______UPDATE (July 8, 2:28 a.m. EDT): The rally appears to have failed from a high at 3.1790 that fell well shy of my benchmark.

Copper's nasty slide has been getting a lot of ink lately, since it is viewed as a harbinger of a weakening economy.  From  a technical standpoint, the futures decisive breach of a midpoint support that had held for 17 months augurs more downside over the near term to at least 2.7780, equivalent to an 11% fall.  If this Hidden Pivot 'D' target were to give way, however, we'd probably be looking at a second wave of selling down to 2.4435.  Camo traders should position from the short side using charts of 15-minute degree or less to identify promising entry points. The hourly chart is where you should look to assess trend strength and to pinpoint reversals. At the moment, it would take an upthrust exceeding 3.2565 to turn the 60-minute chart bullish. _______ UPDATE (April 28, 10:34 p.m. EDT):  Copper has bounced to 3.2890 off a 3.0684 low that left my downside target unsatisfied. The target remains compelling, and so we should be skeptical of this rally. It has achieved impulsive status on the 240-minute chart nonetheless, but just a little more weakness, exceeding a 3.1485 low recorded last Wednesday, would turn the 240-minute chart into a duel between bulls and bears (see inset, a fresh chart).

I'm at a loss to correlate it with the grim global economic picture, but March Copper has tripped a buy signal with this week's impulsive thrust on the daily chart.  Camouflageurs should recognize in the accompanying chart some favorable elements for creating a safe, bullish entry point. However, if we go strictly by the book, the futures have yet to pull back sufficiently to be considered recharged for a C-D follow-through thrust.  That will require a print at 3.7481 or lower, and it is only after this has occurred that you should zoom in on the lesser charts to pick your entry spot. _______ UPDATE (February 7 at 10:01 p.m. EST): Yesterday's weakness brought the futures into our bottoming window. Camo traders should look to the 15-minute chart for inspiration, Specifically, there's a 3.7535 'external' peak recorded Wednesday that could serve our purpose.

Copper has been running in place for nearly a year but is now on the verge of a bullish breakout that promises to keep prices buoyant, at least, in the months ahead. Notice in the chart how yesterday's rally came within 0.0005 points of an external peak recorded in May.  Although a 'b-c' pullback from here would diminish the imputed bullishness of any rally exceeding that peak, it would not negate the prospect of a bull market in its infancy.  On the other hand, a failure to surpass the peak -- and soon -- could consign the futures to indefinite meandering in the wilderness. Click here for information about the upcoming Hidden Pivot Webinar and a $50 coupon — or here for a free trial subscription.

The copper futures have been working their way lower for four days and have traced out a robust pattern with two well-hidden pivots.  The midpoint of the pattern, at 3.3650, is far enough above Friday's low (our 'B' point) to be a potential buy.  If the midpoint doesn't hold then 'B' probably won't either, and the 3.3240 'D' target will be next.  The only way this 'D' target could be more hidden is if we weren't talking about it here on the site. (Posted by Doug “harry” McLagan)

June Copper's breach yesterday of a midpoint support at 3.3963 implies more downside over the near term to 3.2605, its 'D' sibling. The futures can be shorted from current levels or bought with a tight stop-loss at the target, but if you attempt the former you should use the 3.3825 low shown in the chart for 'camouflage'.  This implies taking the first 'X' entry signal on a chart of 5-minute degree or less following an impulsive breach of 3.3825.  We've executed this trade many times in uptrending vehicles, but it's time we started practicing on southbound traffic. _______ Note: The corresponding target for the July contract is 3.2560, and for the external low, 3.2700. _______ UPDATE (July 7, 10:13 a.m. EDT):  The June contract has bounced reflexively off a recent low of 3.2380. It is bearish that the downside target was exceeded by nearly 2 cents, but bulls would take command of the short- to intermediate-term if they can muster a push exceeding May 21's 3.5380 peak.

A seer quoted recently in the Wall Street Journal was predicting a global economic slowdown based on weakness in copper, and although I wouldn't lay odds against the slowdown part of his theory, I see no especially compelling corroboration in high grade's long-term chart. Moreover, if the next thrust pierces the 2.9533 (approximate, since this is actually a continuous chart) midpoint pivot shown, it would be warning copper bears to reef the sails (assuming their paws can handle halyards, jam-cleats and such).

[Back in July, Cam Fitzgerald asserted here in a guest editorial that policymakers would eventually succeed in stabilizing the global financial system, triggering a huge bull market in stocks. He also asserted that commodities and precious metals would not participate in the rally. In the essay below, Cam shouts “I told you so!”  Readers may find themselves disagreeing, however, especially since precious metals have shown signs of life in recent days. RA] “Remember you read this. I am right, and I know it.” Those haughty words were my parting shot when I responded to comments about a guest essay I’d written here in July, “Commodity Bear Says 2012 Election Holds Key.” I had gone out on a limb, expressing my honest opinions that day and the next without a shred of doubt showing under my wrinkled shirt. It was my vision of the future. Commodities were going to fall along with gold, while stocks, particularly blue chips and defensives, would rise sharply in the months ahead. Not satisfied with that prediction, I dug a deeper hole for myself. There would be no QE3, I stated. Commodity speculation had already brought us to the brink of a new recession. Ben Bernanke would not make the mistake of trying that approach again. Instead, I asserted, policy tools would be employed to jump-start the recovery we needed, and this time it would not cost billions to achieve. At the heart of these efforts were the odds that some strategic efforts would pay dividends in improving the electoral chances of the president. I wondered at the time whether I’d regret my boldness. The responses that followed overwhelmingly rejected my theory. The local crowd dumped on me with glee. Mob rules. “Who are you going to position yourself with, Jim Rogers or Cam Fitzgerald?” one

Copper's two-week rise remains a case for the textbooks after this week's pullback.  A rally up to 3.6420 would confirm the elegant daily pattern with a target well above the $4-per-pound level.  In evening trading, the futures have impulsed upward by about seven cents, lending credence to the tentative "C" point.  If the bullish tone persists, traders should watch for small patterns that enable a long-side trade with limited risk.  (Posted by Doug "harry" McLagan.)  Want to learn how to nail swing highs and lows precisely, and to manage trade risk with a simple approach? Click here for information about the upcoming Hidden Pivot Webinar on November 16-17.