Copper

From these levels it would take a 12-cent thrust to turn the daily chart bullish, since that would create the first bullish impulse leg in nearly three months.  Failing that, however, we should expect the weakness to continue down to 4.0255 over the near term (i.e., 3-5 days).  That's a Hidden Pivot support, and it can be bottom-fished with a stop-loss as tight as four ticks. ______ UPDATE (June 23): Lest we become bored to death, let's avert our eyes, since the futures have come down to 4.0240.  That's 15 ticks below the midpoint support, indicating more weakness to come.

September Copper is within pitching-wedge distance of generating its first bullish impulse leg in more than a month on the daily chart.  Buyers need only push the futures six cents above the recent 4.2300 high, surpassing May 3's 4.2815 peak, to do the job.  Failing that, we might expect this vehicle to ease toward the 4.0255 midpoint support of a minor bearish pattern on the 'daily'.

When the Wall Street Journal headlines a supposed crash in commodities, as the newspaper did over the weekend, we want to pay particularly close attention to signs that the selling may be near exhaustion.  In actual fact, however, still more weakness was augured last week when the July futures contract decisively breached the 3.9915 Hidden Pivot support of the pattern shown by 7 cents. Traders should therefore be looking, not for a major bullish reversal, but for a rally to get short.  It could take perhaps 4-6 days to unfold, however, since the 3.9915 target just exceeded was three months in the making. ______ UPDATE: Without much of an upward correction, the futures have embarked on a new leg down -- one that projects to as low as 3.7450. The 3.9145 midpoint support associated with that target has already been exceeded by a penny-and-a-half, so more weakness looks like a good bet.

A nifty trick you can perform with the Hidden Pivot Method is predicting long periods of tedium based on the presence of “dueling impulse legs.” We found them in copious supply in the chart of the Dollar Index, but also, correspondingly, in the euro’s intraday and daily charts. The markets were flatlining on this day, but we tried nonetheless to force a bullish trade in the E-Mini S&P. Alas, it continued lower without tripping a “camouflage” entry signal. We also discovered a possible breakdown shaping up in Crude, with a similar pattern already developing in Copper.

Copper's most recent top came within less than two cents of a Hidden Pivot target that has been more than five months in coming, suggesting that the high may be an important one.  However, price action since has had the appearance of a consolidation, which if true would imply there's a thrust coming that will hit 4.6705.

Intraday charts of higher degree suggest that there are two Hidden Pivots not far above where we should look for a possible top, or at least tradable resistance: 4.5225, or 4.5870. There is no clear "midpoint effect" tied to either target, but because there are so few coordinates to choose from here, this seems more likely to mean that the rally is going to achieve the targets, at least, than that the patterns themselves will turn out not to have been analytically meaningful.

Technically speaking, Copper has taken a much harder hit recently than Gold and Silver.  Is this where they finally part company?  We could know soon, since the December contract is tracing out a downtrending abc with the potential to produce an analytically telling Hidden Pivot midpoint support. I've drawn a few hypothetical price bars to illustrate this in the accompanying chart. You should stay tuned in any event, since the pattern looks likely to develop in a way that could yield a low-risk entry point for bottom-fishing traders.

Rally targets at 3.8605 and 4.2480 are discernible on the weekly chart (see inset), and the lower of the two implies that December Copper has a big move ahead of it before any serious impediments turn up.  I've used a long-term chart here because the respective midpoints of the two bullish patterns have been decisively exceeded. However, if we lower our sights to the hourly chart, the first Hidden Pivot resistance we find lies at 3.7920.

December copper impulsed down violently on Wednesday evening and is close to confirming some new bearish targets.  If the futures touch 3.4140 while remaining below 3.4415, new targets will be confirmed at 3.3870 and 3.3325.  This occurs within an active bullish pattern on the daily chart, suggesting that a bottom-fishing opportunity might emerge from the intraday action, which is best viewed on the 15-minute chart.  The smaller pattern, if confirmed, would justify buy and stop orders placed $0.005 apart from each other, risking a hypothetical $113 per contract.  (Posted by Doug McLagan)  _______ UPDATE (2:44 p.m. EDT):  The futures moved the "C" point up to 3.4670 and then confirmed it with a sufficient decline, giving us new targets at 3.4125 and 3.3580.  We continue to like the idea of buying the midpoint and will leave the tout marked as actionable.  Again we recommend risking half a cent ($0.005) per pound of copper on the trade.  The stop should be below 3.4100. _______ FURTHER UPDATE (1:20 a.m. EDT, September 10):  Copper traded down to 3.4065, stopping us out of the trade before bouncing significantly.  In looking at the chart afterward we couldn't help but notice that had we used the 3.5150 "A" point to the left of the one we did use, we would have nailed it.