Tuesday, November 29, 2011

Dr. Copper Update

As I mentioned last week, Dr. Copper bounced off very important support @ 3.21
Price ran into 50 dsma and is closing right on it. Just as everyone has their eyes on the economically important barometer, and a leader of entire (risk-on) commodity sector, I wanted to show how it struggled many times at 50 dsma ever since it peaked in February of this year.

Note how except for July, the price would bounce off, or close above 50 dsma (highlighted in yellow) for a few sessions and reverse. Also  there is a twin pattern within the entire sell-off, which is now culminating at the apex (highlighted in blue).

If we are to witness a sell-off on European / geopolitical worries, it will send Dr. Copper testing 3.21 support again, with open gap @ 3.28 on the way there.

Dr. Copper
(click on chart to enlarge)

Update on Nov 30 @ 11:55 am
Well, Dr. Copper is leaping into the sky. First China cut RRR, and then Big 6 central banks infused extra liquidity in money market via swap rate cut. Price is now well above the 50 dsma and upper trendline of symmetrical triangle. Bulls will be buying the apex backtest. HG/SPX is near 100% correlation here.

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