Copper

[arco]

One of the LincolnFX members asked for a copper chart and thoughts.

Just in case anyone on ST is interested here it is.........

http://i47.tinypic.com/2cgc46g.gif

Commentary is available free on the blog.

Regards - Arco

[peat]

out of curiousity only as I dont have a way to trade copper what is the suggested trade here , to sell in the yellow box?

are the commodity commentaries still going to be available for free on your blog arco?

[arco]

Hi Peat. Probably dependant on what happens against that LL Doji, but maybe short if there is a confirmed reversal pattern at/in the yellow box.

Re the commodities - I will always put some free charts and commentaries on the blog, although it could vary from time to time.

[peat]

see a gartley possibility on the hourly
http://img132.imageshack.us/img132/3974/copper03032010.jpg (http://img132.imageshack.us/i/copper03032010.jpg/)
and have posted in a butterfly possibility as well..
in either case the trigger to short might be somewhere in the orange rectangle (when it comes back there)

and yes actually I can trade copper in Market Maker

[tricha]

At the moment nothing much moves without oil, in the future as oil goes off the platau and down the slippery slope, of Hubbards curve.

Nothing much will move without Copper. It is my belief, ( being a sparkie), it will replace oil as a commodity to keep the world moving.

With the ASX being based on mining.

I'm thinking about a new thread, called Dr Copper, an indicator on the health of the ASX.
Or should I just stick to this one.
Copper Rises Most in a Week on China’s Trade, Auto Data
By Joe Richter & Maria Kolesnikova - Feb 9, 2013 7:36 AM GMT+130



Copper futures rose the most in a week as China’s trade expanded more than forecast, and car sales jumped to a record in the Asian nation, the world’s biggest consumer of industrial metals.
In January, exports from China surged 25 percent and imports climbed 29 percent from a year earlier, both topping projections by economists in Bloomberg surveys, government data showed today. Sales of passenger vehicles surged 49 percent, a state-backed trade group said.
“The Chinese data signals that business continues to pick up,” Harry Denny (http://search.bloomberg.com/search?q=Harry%20Denny&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “Copper is being supported by overall optimism on a recovery.”
Copper futures for March delivery rose 0.9 percent to settle at $3.7595 a pound at 1:15 p.m. on the Comex in New York, the biggest gain for a most-active contract since Feb. 1.
The International Copper Study Group says an average midsize car contains about 50 pounds of the metal.
Financial markets in China will close next week for the Lunar New Year. Imports of copper rose 2.9 percent in January from December, customs data showed today.
Stockpiles monitored by the Shanghai Futures Exchange fell to 196,699 metric tons, the lowest in more than three months.
On the London Metal Exchange, copper for delivery in three months climbed 1.1 percent to $8,294 a ton ($3.76 a pound). Aluminum, zinc tin, lead and nickel also gained.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Joe Richter in New York at jrichter1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

[Hoop]

.......I'm thinking about a new thread, called Dr Copper, an indicator on the health of the ASX.
Or should I just stick to this one.

Hmmm... I have noticed over the previous few weeks the copper / Dow divergence...Divergences whether they come to fruition or not should always be respected as a possible warning sign.

Copper is nicknamed Dr Copper because of its ability to mirror the fortunes of the worlds economies.

if that is so...

Dr Copper is telling us that the world economy has turned around from a possible early recovery phase back down again ... and strangely the media which is always seeking bad news hasn't spotted it..... yet.!!!....

The media are barking at this Cyprus banking crisis thing, which is in itself strange really, as Cyprus is a minnow ...or better put, not big enough to be a fish but more the size a plankton lifeform in this global pond....maybe the media is sniffing around because it senses that under the murky surface of this pond lurks something much bigger and much more dangerous..


Dr Copper is beginning to suffer technical damage from this triangle pattern and with the recent triangle break downward the warning bells have started to ring.....

An economic storm somewhere could be brewing, methinks.

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper20032013.png

[Lizard]

Thanks Hoop. Although I'm glad I didn't pull the ripcord last time copper signalled a warning... :cool:

http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936 (http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936)

However, I am looking at the chart of my portfolio and recognising that it "looks" as though gains should either slow considerably or turn negative in the coming quarter if it is not to get dangerously exponential. If it wasn't that bank deposit rates were so low, I might feel more enthused about taking profits though... instead I just find myself tempted to plough funds straight back into the market.

[Aaron]

Any guesses as to what will happen. I feel like a dummy in cash waiting for another leg down in the financial markets fighting the world central banks. The whole ideaology seems to be that we need endless growth and inflation. if that is true then I should be leveraged to a high level and wait for inflation to take care of everything. The Cyprus deal just reinforces that it is the dummys who save who get hit. It is all geared to looking after the people who have borrowed money. I am holding out but feel very frustrated and concerned.
Reasons for not investing
1/ Investments are at a high level (new highs in the US etc) buying high is not usually a good strategy, real estate in NZ is also bouyant.

2/ If doctor copper is right the real world as opposed to the financial world might be slowing down in spite of all the liquidity.

3/If Cyprus's politicians decided to default to whoever they owe money, what will happen, the bank can't appoint a liquidator for an independent state with their own army. Would that trigger a domino effect and as lenders needed to liquidate assets could there be firesale prices like march 2009 once again.

4/ What about if interest rates rose. Interest rates aren't set on the free market they are centrally controled so this is unlikely.

Reasons for investing
1/ Interest rates unlikely to increase ahead of inflation.

2/ continued money printing and debasement of currencies means cash is or will be trash. Shares and a margin loan might be a better bet

3/Still plenty of bears out ther meaning we haven't reached the top yet and in dollar terms assets values might never come down

Don't know why I bothered writing this. Just trying to justify my position in the face of all the evidence to the contrary.

[Hoop]

Thanks Hoop. Although I'm glad I didn't pull the ripcord last time copper signalled a warning... :cool:

http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936 (http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936)

However, I am looking at the chart of my portfolio and recognising that it "looks" as though gains should either slow considerably or turn negative in the coming quarter if it is not to get dangerously exponential. If it wasn't that bank deposit rates were so low, I might feel more enthused about taking profits though... instead I just find myself tempted to plough funds straight back into the market.

Yes Liz the last time copper bounced back up from the next support down (a very strong 3.30 level combining both support and NNline together)...I'm not a great fan of trendline breaks on their own.. as an uptrend can decelerate but still go up...but in the case of Copper...this is not entirely true ...Copper seems to be a train wreck event happening in a very slow motion...If you go back to my copper company post that you highlighted and see the 5 year chart the N N line (much more reliable line) marked as the blue dotted line to watch..this has finally broken and thats the worry....That blue dotted N N line is the same line marked in yellow in my above chart .....

Now we have to be a bit careful about this ...Dr Copper is a loose economic sentiment indicator of sorts (not always reliable)...The economy and the sharemarket show a poor corellation... Copper seems to ally itself at certain times and follow a similar pattern to Equity indexes...Not all Global indexes are "in sync" atm...so you get articles written that pick the best parts of copper/equity changing at Equity cycle turnpoints with examples...ignoring the times when it doesn't happen.

The famous book The Anatomy of the Bear by Russell Napier...to which I have quoted many times on the Investing Strategies and the Secular Bear Market thread highlights the constant signal (yet to be proven wrong 0% failure rate) * Commodities Count. The end of commodity price declines also marked all 4 major equity lows, with copper playing a prominent role as it preceded or coincided with every equity rebound. Russell Napier.....
This only occurs at the bottom of an Equity Cyclic Bear Market (after the destructive C wave) Copper signals an upturn of approx 6 weeks before the Equity cyclic bottom...

Unfortunately.. media assumes copper indicates all cyclic reversal points including the end of cyclic Bull Markets as well (http://www.moneyweek.com/investments/stock-markets/us/five-signs-that-the-market-has-peaked-21600)...This is not absolutely true as there is a failure rate here.

By Watching Copper long term one gets to know its behaviour...it tends to have but not always a bad patch Copper down/equity up) during the middle of an Equity Bull Cycle.... Media becomes negative about this assuming the Bear Cycle is still operating with the end of an extraordinary rally in sight...Copper watchers will know this to be wrong (re Russell Napier's copper indicator) and they can assume it's more likely a Cyclic Bulls mid life crisis..

So why do I warn about this kind of thing in my posts??...Its an economic warning and also something unusual is happening ..A reverse correlation with copper going down/ equities going up event is lasting a long time at a point when the Bull is rather mature so its a strange mid-life crisis signal......If it is indeed a middle point of the Bull market cycle,,then the bull is going to be unusually very old when it dies,,,and the secular cycle pattern hypothesis is going to be proved wrong with the S&P500 climbing to well over the 1600 probably 2000+.....I find this as a low chance scenario

So when everything is weird and conflicting is pays to be very cautious to the point of putting your earmuffs on just in case there is a big bang...eh. (by all means stay in the market and ride out the good times but caution it with tightened stops and applied heightened discipline....earmuffs used to keep out media noise)...but if it all turns to custard get out, except the party is over... don't stay in and rely on hope and denial.

Its common (but not a certainty) to have a reverse correlation after the end bull cycle by having copper going up / equities down...That I assume is what the media may "mistakenly" be picking up on at this moment but they have got the reverse thing the wrong way around....This scenario typically brings out the denial of the end of the bull market in most people...Copper going up assuming an "growing" economy yet the equity market is tanking for some "unknown" (to the FA people) reason.

[Hoop]

with the S&P500 climbing to well over the 1600 probably 2000+.....I find this as a low chance scenario

So when everything is weird and conflicting is pays to be very cautious to the point of putting your earmuffs on just in case there is a big bang...eh. (stay in the market with tightened stops and applied heightened discipline....earmuffs used to keep out media noise))

Its common (but not a certainty) to have a reverse correlation after the end bull cycle by having copper going up / equities down...That I assume is what the media may "mistakenly" be picking up on at this moment but they have got the reverse thing the wrong way around....This scenario typically brings out the denial of the end of the bull market in most people...Copper going up assuming an "growing" economy yet the equity market is tanking for some "unknown" (to the FA people) reason.

I'll attempt to show a chart Copper + Equity 4 Indexes when I get some time....The adhoc chart I'm using is showing the NZX50 out in front as the best performer :) all the indexes are rising with the copper uncharacteristically to the naked eye diverging against the rest

[Aaron]

Hoop where is the best place to find commodity prices on the web. Are commodity prices considered a leading indicator of economic activity. The Baltic Dry Index was also put up as a economic indicator but is the current low price for shipping just a reflection of an oversupply of ships to economic activity. The baltic dry index has been bumping along at price levels only seen briefly in 2009 but now look to be more permanent.
I guess company earnings are what keep share prices up, low interest rates and a plentiful money supply will help. Using current low interest rates to justify share price valuations might end badly if interest rates go up but it is hard to imagine a day when interest rates will go up again.

[Hoop]

Hi Aaron.

This is your easy to access in your face front page from tradingcharts (http://tfc-charts.w2d.com/menu.html)...this may suit your needs if you are in a hurry... it also gives a deeper look as well...

check out the sites below as well... interactive stuff is very useful.


Charted sites below gives you the ability to chart online with downloading software..

http://www.kitcometals.com/charts/copper_historical_large.html#30days

http://stockcharts.com/h-sc/ui a very good site once you get use to it..access to the stock codes can be a bit painful ...but once memorized you're off and away

An interesting part to Stockcharts is the interactive chart (sector etfs) showing the different sectors (http://stockcharts.com/freecharts/perf.php?[SECT]) there is a 200day default slider(you can change the time frame to suit your purpose)...note how each sector has its heyday at a specific time of the Equity cycle...e.g Energy (oil) near the end of a Bull cycle...Also highlights the bubbles Tech bubble 2000 and its demise in 2001...Ultities displaying their lagging signatures...Also of importance is the falling away of industrials and materials in 2006 but the Equity market is upward and bullish (bull cycle) indicating another example that the stockmarket and the economy are not correlated...

http://www.findata.co.nz/Markets/StockQuote/NYMEX/QL.C.htm

http://bigcharts.marketwatch.com/default.asp?siteid=&avatar=seen&dist=ctbc





I use Incredible Charts as a source for all commodities data..it has access to many database providers...in fact I use it for nearly everything..including most of my posted charts.
It is an on line charted software package but you have to download the program (http://www.incrediblecharts.com/free-charting_software/free_download.php)to use it...The free version is excellent..

As with all charting you have the ability to compare sectors....indexes, individual stocks, or compare with anything really this is valuable as the human mind loses perspective when using recall to compare, and is thus regarded as a highly unreliable option.

[Hoop]

........Now we have to be a bit careful about this ...Dr Copper is a loose economic sentiment indicator of sorts (not always reliable)...

........By Watching Copper long term one gets to know its behaviour...it tends to have but not always a bad patch Copper down/equity up) during the middle of an Equity Bull Cycle....

........So why do I warn about this kind of thing in my posts??...Its an economic warning and also something unusual is happening ..A reverse correlation with copper going down/ equities going up event is lasting a long time at a point when the Bull is rather mature so its a strange mid-life crisis signal.....

........So when everything is weird and conflicting is pays to be very cautious to the point of putting your earmuffs on just in case there is a big bang...eh. (by all means stay in the market and ride out the good times but caution it with tightened stops and applied heightened discipline....earmuffs used to keep out media noise)...

........Its common (but not a certainty) to have a reverse correlation after the end bull cycle by having copper going up / equities down...That I assume is what the media may "mistakenly" be picking up on at this moment but they have got the reverse thing the wrong way around.....

Yep...I'm cynical of the Media..It one of my biases in my life.....

The media makes news of this happening now and is suggesting the "now" reasons using all sorts of accurate economic knowledge....yet it has been happening for months......and.....it is a cyclic thing and although not 100% occurrence it often happens at a similar time within each cycle (mid life Equity Bull Cycle)...History tell you so..so history is a good teacher not the media ..

My homework says these factors may all contribute but its the same game that plays out often (not always) with past mid life Equity Bull Cycles**.. History says the game doesn't change, only its players.

** (opinion only)..Hoop thinks this game was delayed and has started late in the day (cycle)...

A chart to clarify yet to be posted

http://mw3.wsj.net/MW5/content/story/images/print-logo.png Commodities Corner
http://mw4.wsj.net/_newsimages/columnists/picache_myra.jpg March 22, 2013, 10:20 a.m. EDT
Here’s why copper has lost its indicator role
By Myra P. Saefong (mpicache@marketwatch.com), MarketWatch

http://ei.marketwatch.com/Multimedia/2013/03/21/Photos/MG/MW-BA639_dr_cop_20130321181955_MG.jpg?uuid=7ff8e754-9275-11e2-8a9d-002128040cf6
Dr. Copper is usually a good indicator for economic trends and markets.
SAN FRANCISCO (MarketWatch) — Dr. Copper, as the industrial metal is known to investors, might be offering Wall Street the wrong economic prognosis, or maybe we’re just misreading it.
After all, a physician’s handwriting is tough to read, and so is that of copper, whose “doctor” title refers to it as an indicator for economic trends and equity markets.
“Correlations have certainly broken down between equities and copper prices,” said Brinker Capital senior portfolio manager Andrew Rosenberger.
Click to Play http://m.wsj.net/video/20130322/032213mwcopper/032213mwcopper_512x288.jpg (http://www.marketwatch.com/Story/story/print?guid=800FF59A-925A-11E2-8A9D-002128040CF6#)
Why copper is less of an indicator Copper is usually a good indicator for economic trends and equity markets. MarketWatch's Jim Jelter explains why that has changed.

“Market participants used to look towards copper as an indicator of equity returns,” he said. “That may be true in a capital-expenditure driven economy like we had in 2005-2008, but this recovery, to date, has been devoid of meaningful capex.”
Data on the metal’s prices and U.S. equities show a directional divergence, with stocks doing well while copper isn’t, and with the economy showing modest growth.
Copper futures prices (CNS:HGK3) dropped more than 6% year-to-date as of Thursday. They gained 6.3% for 2012, but that was after a nearly 23% drop in 2011.
Meanwhile, U.S. equities have rallied, with the benchmark Dow Jones Industrial Average (DJI:DJIA) up over 10% so far this year, after gains of 7.3% last year and 5.5% in 2011.
For all of 2012, the U.S. economy increased (http://www.marketwatch.com/story/economy-grew-just-barely-in-fourth-quarter-2013-02-28) at a 2.2% pace, compared with 1.8% in 2011.
The Federal Reserve (http://www.marketwatch.com/story/fed-sticks-to-stimulus-plan-2013-03-20) this week said it expects the economy to grow at a moderate pace, and economists project growth in the first quarter to rise to 2.5% after barely growing in the fourth quarter.
But if you look closely, you might see a good reason why copper’s not an accurate indicator of economic conditions and equity markets right now.
U.S. Bank Wealth Management senior investment strategist Robert Haworth said copper is reflecting its underlying supply and demand fundamentals.
“Its economic signal is slightly muted by excess supply currently,” he said. “We believe global economic growth should accelerate over the course of this year, taking up excess supplies and returning copper to its status as a signal of economic activity.”
Copper’s fall Copper’s performance has been disappointing in light of some of the latest economic indicators, which point to improvements in the U.S. and Chinese manufacturing sectors.

http://ei.marketwatch.com/Multimedia/2012/09/28/Photos/MD/MW-AU878_copper_20120928135555_MD.jpg?uuid=c7f83848-0995-11e2-95d5-002128049ad6
Reuters Enlarge Image
A dockworker arranges a shipment of copper.
“There is overall optimism about the American economy steadily recovering, unless of course the costs of sequestration have a greater-than-expected impact,” said Ted Arnold, an independent, London-based consulting-minerals economist.
And although “no one doubts for a minute that China will not grow this year,” there are an “awful lot of bulls out there expecting much more from Chinese growth than now looks likely,” he said.
Business conditions for Chinese manufacturers (http://www.marketwatch.com/story/china-factories-gather-pace-in-march-hsbc-2013-03-20) saw further improvement in March, according to HSBC data Thursday. The U.S. flash manufacturing Purchasing Managers’ Index (http://www.marketwatch.com/story/march-us-flash-manufacturing-pmi-rises-to-549-2013-03-21-991922) (PMI) also rose in March.
Data Thursday also showed that the German manufacturing sector unexpectedly contracted in March, and the preliminary composite PMI for the euro zone (http://www.marketwatch.com/story/euro-zone-pmi-signals-deeper-march-downturn-2013-03-21) dropped to a four-month low.
Overall, “copper has been a flop as of late, as the growth prospects have been dimmed,” mostly owing to the Chinese government moving to reign in its overheated housing market (http://www.marketwatch.com/story/china-adviser-property-curbs-may-hit-demand-2013-03-04), said Price Futures Group senior market analyst Phil Flynn.
“Sharply rising Chinese home prices are raising expectations of more government clamp-downs on the sector, thereby reducing the Chinese demand for copper,” he said.
And true to China’s usual veil of secrecy, the International Copper Study Group (http://www.icsg.org/index.php/component/jdownloads/finish/114/1359?Itemid=) said that based on preliminary data, anecdotal evidence suggests unreported inventories held in bonded warehouses in China increased significantly during 2012, and Chinese industrial use of copper might have been significantly less than apparent use.
“Accounting for this inventory increase would significantly alter the calculated market balance,” the ICSG said. In other words, there could be a large surplus of Chinese copper supplies the market doesn’t know about.
“There is too much copper and too little demand since the China facade of rampant growth is being revealed for the farce that it is,” said Jeffrey Sica, president and chief investment officer of Sica Wealth Management.
Much of the commercial real-estate in China sits vacant as “proof that China cares more about the appearances of growth than actual growth.”
Prognosticator Beyond that, copper still has the hints of being the great prognosticator many expect it to be — it’s just not as easy to read its forecast.
“Some market participants consider copper as a good predictor of the economy,” said Price Asset Management managing director of institutional sales Alan Konn.
However, “how far in advance does it really predict?” he said. “There are constantly major swings in prices that provide little guidance on the economy a year or two out.”
In the near term, “it is a combination of short-term demand and supply, inventory levels and sentiment that drive the price,” said Konn, whose firm specializes in commodities for institutional and high-net-worth investors. “It is the industrialization throughout the world that generates long-term demand.”
That said, the good news is that China’s economy is still growing, albeit at a slower pace than in the past, and that’s been the driving force for commodities in general.
China is “still in demand mode,” and the U.S. is starting to see improved economic numbers, said Kevin Kerr, president and chief executive offer at Kerr Trading International.
“It’s certainly not a barn-burner economy, but it’s at least starting to stem the bleeding,” he said. “If that trend continues, then demand for copper should pick up as copper prices seemed to have found a foothold here at these levels.”
On Thursday, May copper settled at $3.45 a pound on the Comex division of the New York Mercantile Exchange, down 2.5% for the week to date.
Right now, the metal is acting more like an investment than a commodity — “an investment in the future global recovery and demand,” Kerr said.





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[Hoop]

Thanks Hoop. Although I'm glad I didn't pull the ripcord last time copper signalled a warning... :cool:

http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936 (http://www.sharetrader.co.nz/showthread.php?6745-Copper-Company&p=376936&viewfull=1#post376936)

However, I am looking at the chart of my portfolio and recognising that it "looks" as though gains should either slow considerably or turn negative in the coming quarter if it is not to get dangerously exponential. If it wasn't that bank deposit rates were so low, I might feel more enthused about taking profits though... instead I just find myself tempted to plough funds straight back into the market.

Hi Liz. That past copper warning (On the copper/company thread ) the Copper/DOW were in sync and they did successfully signal an Equity Bull market cycle correction..surprisingly that correction was very small ...Both recovered well and went on to record higher highs as expected...Long term buy and hold investors should not be too worried about bull market corrections... That post just highlighted coppers indication of a correction...the short termers get out then back in.
The forex thread investors would be more interested in these in sync stuff with one just ahead of the other..e.g coppers half a day equity pre-warnings.

Liz...You responded to my latest post possibly because you are sensing a possible change.....due to some weird stuff going on.
At the moment copper is out of sync copper down equity up is a weird set up ...this copper/dow strange intereaction last happened 5 years ago.
I have posted this on the Goldilocks and the 3 bears thread (http://www.sharetrader.co.nz/showthread.php?7008-Goldilocks-and-the-3-Bears-%28FTSE100-DOW-S-amp-P500&p=403430#post403430)you and some others may be interested in having a look.

[Hoop]

Hmmm... I have noticed over the previous few weeks the copper / Dow divergence...Divergences whether they come to fruition or not should always be respected as a possible warning sign.

Copper is nicknamed Dr Copper because of its ability to mirror the fortunes of the worlds economies.

if that is so...

Dr Copper is telling us that the world economy has turned around from a possible early recovery phase back down again ... and strangely the media which is always seeking bad news hasn't spotted it..... yet.!!!....

The media are barking at this Cyprus banking crisis thing, which is in itself strange really, as Cyprus is a minnow ...or better put, not big enough to be a fish but more the size a plankton lifeform in this global pond....maybe the media is sniffing around because it senses that under the murky surface of this pond lurks something much bigger and much more dangerous..


Dr Copper is beginning to suffer technical damage from this triangle pattern and with the recent triangle break downward the warning bells have started to ring.....

An economic storm somewhere could be brewing, methinks.

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper20032013.png

The Copper/Dow divergence has widened..as this an unstable scenario..either copper will have to correct, or the DOW has a bull market correction (cyclic reversal?) or both (a temporary overcorrect).

Copper update chart
The symmetrical triangle break warning bells rang true

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper23042013-1.png (http://s458.photobucket.com/user/Hoop_1/media/Copper23042013-1.png.html)

[janner]

The Baltic shipping rates on Copper have gone through the floor since April 1.

[macduffy]

Here's a view on the longer term outlook for copper.

http://www.resourcesrising.com.au/industry_spotlight.php?a=read&sid=526

[h2so4]

Supply and demand......mmm......makes sense.

[Hoop]

Here's a view on the longer term outlook for copper.

http://www.resourcesrising.com.au/industry_spotlight.php?a=read&sid=526

It seems this article hasn't updated what has happened this week...There has been a significant fall in inventory levels from very high to very high levels :) refer Kitcometals (http://www.kitcometals.com/charts/copper_historical_large.html#30days)... the rapid fall may or may not be sustainable but the copper price may indicate it is sustainable as the price seems to have bottomed out at $3.07 (see the last updated chart)




The Copper/Dow divergence has widened..as this an unstable scenario..either copper will have to correct, or the DOW has a bull market correction (cyclic reversal?) or both (a temporary overcorrect).

Copper update chart
The symmetrical triangle break warning bells rang true

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper23042013-1.png (http://s458.photobucket.com/user/Hoop_1/media/Copper23042013-1.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/Copper30052013.png (http://s458.photobucket.com/user/Hoop_1/media/Copper30052013.png.html)

[Hoop]

Update:
yes copper did bottom out at 3.04 right on target and in doing so has set a strong near hortizontal support floor which is the base of this descending triangle pattern.
There are faint bullish signs that the Copper price maybe entering a new phase

However the faint bullish chart behaviour are cautionary signs at the moment....From the chart Copper has yet to move outside its shorter term rectangle pattern and there is a good argument that the descending dotted line is the upper part of the longer term descending triangle which, if so, would indicate that the Copper price has not broken out yet...

Descending triangles are known as bearish continuation patterns but 36% of the time the price does breakout upwards (Bulkowski)

Also of note.... both patterns can not survive within each other for much longer there WILL BE be a technical breakout soon...

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper18122013-1.png (http://s458.photobucket.com/user/Hoop_1/media/Copper18122013-1.png.html)

[Valuegrowth]

Yep...I'm cynical of the Media..It one of my biases in my life.....

The media makes news of this happening now and is suggesting the "now" reasons using all sorts of accurate economic knowledge....yet it has been happening for months......and.....it is a cyclic thing and although not 100% occurrence it often happens at a similar time within each cycle (mid life Equity Bull Cycle)...History tell you so..so history is a good teacher not the media ..

My homework says these factors may all contribute but its the same game that plays out often (not always) with past mid life Equity Bull Cycles**.. History says the game doesn't change, only its players.

** (opinion only)..Hoop thinks this game was delayed and has started late in the day (cycle)...

A chart to clarify yet to be posted

http://mw3.wsj.net/MW5/content/story/images/print-logo.png Commodities Corner
http://mw4.wsj.net/_newsimages/columnists/picache_myra.jpg March 22, 2013, 10:20 a.m. EDT
Here’s why copper has lost its indicator role


By Myra P. Saefong (mpicache@marketwatch.com), MarketWatch

http://ei.marketwatch.com/Multimedia/2013/03/21/Photos/MG/MW-BA639_dr_cop_20130321181955_MG.jpg?uuid=7ff8e754-9275-11e2-8a9d-002128040cf6
Dr. Copper is usually a good indicator for economic trends and markets.
SAN FRANCISCO (MarketWatch) — Dr. Copper, as the industrial metal is known to investors, might be offering Wall Street the wrong economic prognosis, or maybe we’re just misreading it.
After all, a physician’s handwriting is tough to read, and so is that of copper, whose “doctor” title refers to it as an indicator for economic trends and equity markets.
“Correlations have certainly broken down between equities and copper prices,” said Brinker Capital senior portfolio manager Andrew Rosenberger.
Click to Play http://m.wsj.net/video/20130322/032213mwcopper/032213mwcopper_512x288.jpg (http://www.marketwatch.com/Story/story/print?guid=800FF59A-925A-11E2-8A9D-002128040CF6#)
Why copper is less of an indicator

Copper is usually a good indicator for economic trends and equity markets. MarketWatch's Jim Jelter explains why that has changed.

“Market participants used to look towards copper as an indicator of equity returns,” he said. “That may be true in a capital-expenditure driven economy like we had in 2005-2008, but this recovery, to date, has been devoid of meaningful capex.”
Data on the metal’s prices and U.S. equities show a directional divergence, with stocks doing well while copper isn’t, and with the economy showing modest growth.
Copper futures prices (CNS:HGK3) dropped more than 6% year-to-date as of Thursday. They gained 6.3% for 2012, but that was after a nearly 23% drop in 2011.
Meanwhile, U.S. equities have rallied, with the benchmark Dow Jones Industrial Average (DJI:DJIA) up over 10% so far this year, after gains of 7.3% last year and 5.5% in 2011.
For all of 2012, the U.S. economy increased (http://www.marketwatch.com/story/economy-grew-just-barely-in-fourth-quarter-2013-02-28) at a 2.2% pace, compared with 1.8% in 2011.
The Federal Reserve (http://www.marketwatch.com/story/fed-sticks-to-stimulus-plan-2013-03-20) this week said it expects the economy to grow at a moderate pace, and economists project growth in the first quarter to rise to 2.5% after barely growing in the fourth quarter.
But if you look closely, you might see a good reason why copper’s not an accurate indicator of economic conditions and equity markets right now.
U.S. Bank Wealth Management senior investment strategist Robert Haworth said copper is reflecting its underlying supply and demand fundamentals.
“Its economic signal is slightly muted by excess supply currently,” he said. “We believe global economic growth should accelerate over the course of this year, taking up excess supplies and returning copper to its status as a signal of economic activity.”
Copper’s fall

Copper’s performance has been disappointing in light of some of the latest economic indicators, which point to improvements in the U.S. and Chinese manufacturing sectors.

http://ei.marketwatch.com/Multimedia/2012/09/28/Photos/MD/MW-AU878_copper_20120928135555_MD.jpg?uuid=c7f83848-0995-11e2-95d5-002128049ad6
Reuters Enlarge Image
A dockworker arranges a shipment of copper.
“There is overall optimism about the American economy steadily recovering, unless of course the costs of sequestration have a greater-than-expected impact,” said Ted Arnold, an independent, London-based consulting-minerals economist.
And although “no one doubts for a minute that China will not grow this year,” there are an “awful lot of bulls out there expecting much more from Chinese growth than now looks likely,” he said.
Business conditions for Chinese manufacturers (http://www.marketwatch.com/story/china-factories-gather-pace-in-march-hsbc-2013-03-20) saw further improvement in March, according to HSBC data Thursday. The U.S. flash manufacturing Purchasing Managers’ Index (http://www.marketwatch.com/story/march-us-flash-manufacturing-pmi-rises-to-549-2013-03-21-991922) (PMI) also rose in March.
Data Thursday also showed that the German manufacturing sector unexpectedly contracted in March, and the preliminary composite PMI for the euro zone (http://www.marketwatch.com/story/euro-zone-pmi-signals-deeper-march-downturn-2013-03-21) dropped to a four-month low.
Overall, “copper has been a flop as of late, as the growth prospects have been dimmed,” mostly owing to the Chinese government moving to reign in its overheated housing market (http://www.marketwatch.com/story/china-adviser-property-curbs-may-hit-demand-2013-03-04), said Price Futures Group senior market analyst Phil Flynn.
“Sharply rising Chinese home prices are raising expectations of more government clamp-downs on the sector, thereby reducing the Chinese demand for copper,” he said.
And true to China’s usual veil of secrecy, the International Copper Study Group (http://www.icsg.org/index.php/component/jdownloads/finish/114/1359?Itemid=) said that based on preliminary data, anecdotal evidence suggests unreported inventories held in bonded warehouses in China increased significantly during 2012, and Chinese industrial use of copper might have been significantly less than apparent use.
“Accounting for this inventory increase would significantly alter the calculated market balance,” the ICSG said. In other words, there could be a large surplus of Chinese copper supplies the market doesn’t know about.
“There is too much copper and too little demand since the China facade of rampant growth is being revealed for the farce that it is,” said Jeffrey Sica, president and chief investment officer of Sica Wealth Management.
Much of the commercial real-estate in China sits vacant as “proof that China cares more about the appearances of growth than actual growth.”
Prognosticator

Beyond that, copper still has the hints of being the great prognosticator many expect it to be — it’s just not as easy to read its forecast.
“Some market participants consider copper as a good predictor of the economy,” said Price Asset Management managing director of institutional sales Alan Konn.
However, “how far in advance does it really predict?” he said. “There are constantly major swings in prices that provide little guidance on the economy a year or two out.”
In the near term, “it is a combination of short-term demand and supply, inventory levels and sentiment that drive the price,” said Konn, whose firm specializes in commodities for institutional and high-net-worth investors. “It is the industrialization throughout the world that generates long-term demand.”
That said, the good news is that China’s economy is still growing, albeit at a slower pace than in the past, and that’s been the driving force for commodities in general.
China is “still in demand mode,” and the U.S. is starting to see improved economic numbers, said Kevin Kerr, president and chief executive offer at Kerr Trading International.
“It’s certainly not a barn-burner economy, but it’s at least starting to stem the bleeding,” he said. “If that trend continues, then demand for copper should pick up as copper prices seemed to have found a foothold here at these levels.”
On Thursday, May copper settled at $3.45 a pound on the Comex division of the New York Mercantile Exchange, down 2.5% for the week to date.
Right now, the metal is acting more like an investment than a commodity — “an investment in the future global recovery and demand,” Kerr said.





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Thank you all for the informative discussions here.“Why copper is less of an indicator

"Copper is usually a good indicator for economic trends and equity markets. MarketWatch's Jim Jelter explains why that has changed.”

Regarding above. It is very inversing. It looks like things are changing now. Though I followed copper market those days to get some market indications surprisingly later I stopped following it.

[Hoop]

Disagree somewhat MarketWinner...
MarketWatch has become rather infected with tunnel vision.. its view that USA is dominant and the rest of the world follows is not always true....also they have mentioned only bits of market physics and seemed to have gone away from the basic Market systems theory and formed a new but false logical view to justify the markets actions.. (probably all due to QE manipulating which has warped the Equity Market).

Remember way back I mentioned that... The Copper market is widely published by the Media to be closely correlated with Equity market...this is not strictly true..the last stage of the equity market often sees but not always the two diverge for a few months (low interest rates bottoming out + China could be the recurring factor with each cycle).

Dr Copper not an economic indicator now???...

I think it still is.....The media sees a buoyant Equity Market and refers this to where the Copper market is as a comparison ..but unfortunately its the Equity market market that is warped at the moment caused by abnormal low interest rates regulating the system via QE, but the USA analysts view it differently and assume Dr Copper is warped.

It's hard to explain in a short post that needs 200+ pages to explain but...
View this Video (http://video.ft.com/2876357806001/Dr-Copper-vs-equities/Markets) from FT.com
as well as referring my charts above and this QE readjusted S&P500 chart below that Winner69 posted

http://www.sharetrader.co.nz/attachment.php?attachmentid=5257&stc=1&thumb=1&d=1388522633

This sheds a light on Dr Copper and makes it less confusing now..eh?:)

[Valuegrowth]

Thank you for your detailed analysis. I really appreciate.

[macduffy]

2014 a Defining Year for Copper?

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=BEF54A04-BA5C-33EE-F6E51F9BF24E0F48

What d'you reckon Hoop?

Cheers

[Hoop]

2014 a Defining Year for Copper?

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=BEF54A04-BA5C-33EE-F6E51F9BF24E0F48

What d'you reckon Hoop?

Cheers

Dunno Macduffy...But I'm eying up the ozzy copper miners and in waiting mode with them At this moment in time
Its been a month since I posted my chart #22.. it seems copper still wants to flirt and test the chart's resistances ..temporarily broke out then declined back into that rectangular pattern ...That sort of action tends to try the chartists patience somewhat

...so as your posted article says it is still a waiting game...

I sometime wonder if using the US$ on the chart is telling the whole story here...QE has had a major regulating effect and so creates uncertainty within markets which normally act as free market...
As China takes 40% of the world's copper, I thought I would change currencies using Y/lb instead of US$/lb in an attempt to neutralise some of the USA QE effects.

The infomine chart below tells a similar story of resistance touching and failing at the Y20 and copper is once again having another assault at that Y20 support..This Yuan chart looks ugly though..There was a triple top (2006-2008) and now its looks like a bearish complex Head and shoulders pattern (2010=2013) could be forming with that dreaded neck break possibility occurring in May 2013...
Again it shows a wait and see game...

I personally would analyse any questionable breakout on the US$/lb chart ...I would back it up using the Y/lb chart as confirmation.


http://www.infomine.com/ChartsAndData/GraphEngine.ashx?z=f&gf=110563.CNY.lb&dr=max


On a more FA approach..The LME stock levels is rapidly falling suggesting economic upturn and/or a drop off in mining production...This chart below may not entirely be a true story if what the media say about China hoarding unrefined copper is correct ....so again we have to wait and see.

Also MarketWinner question ..Is Copper still an indication of economic growth? This question has merit as with the world entering into an economic growth phase together with another Industrial Revolution (technical and bio-technical)... new materials (some yet to be invented) may replace copper...such as fibre replacing copper lines and smart glass within smart phones and TV's (OLED displays).

http://www.kitconet.com/charts/metals/base/lme-warehouse-copper-5y-Large.gif

[Hoop]

Hmmmm...not nice.....Warehouse stocks historically low too..other stored forms of copper must be in play..

http://i458.photobucket.com/albums/qq306/Hoop_1/Copper11032014.png (http://s458.photobucket.com/user/Hoop_1/media/Copper11032014.png.html)


http://www.kitconet.com/charts/metals/base/lme-warehouse-copper-5y-Large.gif