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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Tuesday, September 20, 2011

"Copper" for your thoughts?

Among many other uses, copper is useful for the two things in life that are a certainty...paying one's taxes and funeral costs...although it will take a lot of pennies to to that.

The chart below depicts a 3 days/candle timeframe on Copper. The current candle began today. Overlayed on the chart are 2 regression channels. Last Thursday, price broke below near-term support of 3.8785 and continued to fall into the end of today's trading. Price is currently sitting below the -1 deviation levels of both channels and is in between the 50 sma (red) and 200 sma (pink). The next support level is just below at 3.666...with major support below at 3.53 where there is a confluence of:
  • price support,
  • the rising 200 sma,
  • the -2 deviation level of the shorter downtrending regression channel,
  • and the neckline of the former Head & Shoulders pattern that was broken in July 2008 which began the plunge to the lows in December of that year where price firmed before the Major Indices did in March of 2009.

Since this commodity has broken below the August support level and is displaying relative weakness to the Major Indices (Dow 30, S&P 500, Nasdaq 100, and Russell 2000), it will be interesting to see whether it continues to drop after the Fed meeting report comes out tomorrow and over the next days and weeks to come, and whether the Major Indices will follow.