The Professor Of Economics is speaking , are we listening?
CRI's Weekly Commodity Trend Survey turned bearish of Copper over the past week's report. The survey is Short from $3.195 with stops just above recent highs ($3.353) and a target of $3.06 (testing lows from 06/28/13). This Risk/Reward ratio isn't enough in itself to warrant me actually taking a position but with this backdrop in mind, I thought it would be prudent to take a look Copper prices from a longer term perspective to try and get an idea of how significant a test of these past summer's lows really are.
Since the financial crisis bottom in 2008, price rallied smartly to take out the old highs and then backed off precipitously. So much so, we are actually working a bearish price pattern over the medium term (a la CRI's WCTS short stance). The break of the 2.994 level recently suggests prices wants to move lower (lower highs and lower lows) and the price pattern itself (bearish ab=cd harmonic pattern) suggests a target of $2.4435. Coincidentally, the Optimal Long Trade Entry sweet spot (or OTE L ss for short) off the financial crisis lows currently sits at $2.25.
It may take a bit of time to work our way down into that target zone. Should a test of the summer lows hold, counter trend rallies back to resistance are not out of the question. It is my opinion rallies up into resistance (the current OTE short ss level is at 3.9895) ought to represent interesting shorting opportunities. I shall be keeping an eye open for that trade going forward. Conversely, I would only be interested in covering those shorts on an ultimate move into the indicated 'Target Zone' above.
Since the financial crisis bottom in 2008, price rallied smartly to take out the old highs and then backed off precipitously. So much so, we are actually working a bearish price pattern over the medium term (a la CRI's WCTS short stance). The break of the 2.994 level recently suggests prices wants to move lower (lower highs and lower lows) and the price pattern itself (bearish ab=cd harmonic pattern) suggests a target of $2.4435. Coincidentally, the Optimal Long Trade Entry sweet spot (or OTE L ss for short) off the financial crisis lows currently sits at $2.25.
It may take a bit of time to work our way down into that target zone. Should a test of the summer lows hold, counter trend rallies back to resistance are not out of the question. It is my opinion rallies up into resistance (the current OTE short ss level is at 3.9895) ought to represent interesting shorting opportunities. I shall be keeping an eye open for that trade going forward. Conversely, I would only be interested in covering those shorts on an ultimate move into the indicated 'Target Zone' above.