Currently at 3.20 per pound, the chart shows an Eve and Adam bottom forming between 2015 and now. The expected target of this move would be 4.70 which would put the market five cents above its old high set in Feb 2011 of 4.65.
From 4.65 I would expect the market to revisit the 3.30-3.60 region to make a strong bottom for a longer term ascent.
Looking back further on the copper chart, there is a longer term Adam and Eve bottom forming starting in Dec 2008 to present. The target would be 7.365 based off of this longer term pattern.
If copper were to trade up to 4.70 area and come back down to 3.50 area, it would also present an opportunity for an ascending triangle to form with the same target, 7.365, as the Adam and Eve pattern.
With a weakening dollar, look to copper for guidance on inflation going forward.
Comment
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Copper looking for a close above 33085 and a high above 33220. A break above those levels should push copper up to 3.75 range.
Also, watch the dollar index. Looking for lows below 9101 and closes below 9132 to force a break to 8825 region.
A dollar index breakdown would push commodity prices up quickly.
Do you find this kind of analysis really works on such a large scale? The first target I can accept, but for the second target we're looking at what, some 2-4 years? A lot can happen in those years. Besides, we're in that case surely talking about a massive growth in demand or a decline on the supply side, for which it is doubtful if these kind of analyses are predictable?
ngordon
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@Wippedcream, Hi, thank you for your reply. I do find this analysis works on larger scales. I am just talking about patterns that persist throughout the spectrum of securities. Once copper breaks above the old high, there will be no price history and there will be fewer sellers. The last time (May 2005) copper broke its long term high of 1.55 it went on to trade up to 4.04 in a year. That was mainly due to a Chinese short seller being found out and the rest of the market taking the opposite side of the trade.
I think in many highly volatile moves, the market goes higher than most people expected and ultimately lower than most expected as well. Copper is a pretty illiquid market as far as markets go. Usually the greater price moves are based off of supply shocks such as miners going on strike. I think you could see strikes in the coming years to keep the price elevated and maybe a story of a big short seller getting found out which could easily make the price run to the $7 range if timed correctly.
I am mainly just focusing on what the pattern on the chart is telling me. If it ends up being a huge ascending triangle, the target is around 7.40. If it is an Adam and Eve bottom then the target is around 7.40. I will watch to see how the market reacts at key levels to see if the patterns are still intact.
Also of note, if the volume is to be trusted which I would have to verify through the exchange, it looks like a huge accumulation zone between Jan 2015 and now. That would lead me to think higher prices are coming.
Wippedcream
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@ngordon, "Once copper breaks above the old high, there will be no price history and there will be fewer sellers." This I can accept, I'm just reckoning that for the price to take on never-before-seen highs, something else is necessary such as geopolitical, something like the famous rogue chinese short seller in 2005 or miners' strikes as you say. And these are things that one could not tell from a chart. Rather one would then stay tuned to news to see if something of this sort happens?