Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Rise with Stocks
By: Chris Mullen, Gold Seeker Report

Precious metals marketplace OneGold extends a rare offer of Gold and Silver at spot price
By: OneGold

Ira Epstein's Metals Video 1 16 2019
By: Ira Epstein

Goldcorp-Newmont deal points to more M and A
By: Richard (Rick) Mills

Silver – 1993 and 2001 Repeat
By: Gary Christenson

The Newmont-Goldcorp Deal Is Positive News for Gold Mining
By: Frank Holmes

Northern Vertex Mining Presents a Video of the Moss Gold Mine, NW Arizona, USA
By: Northern Vertex Mining Corp.

Gold Holds Steady Near $1,300/oz As Geopolitical Risks Including Brexit Loom Large
By: GoldCore

Gold Seeker Closing Report: Gold and Silver End Slightly Lower in Mixed Trade
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 1 15 2019
By: Ira Epstein

 
Search

GoldSeek Web

 
The Curious Case of Copper

By: Clive Maund

 -- Published: Friday, 29 January 2016 | Print  | Disqus 

I recently watched a movie called The Curious Case of Benjamin Button which some of you may have seen. In this film the lead role, played by Brad Pitt, is born as a decrepit old man and gets steadily younger until he eventually died of old age as a baby. To say that it’s ridiculous is the understatement of the millennium. Yet many people come away from watching this film thinking “How wonderful, if we all kept getting younger!” As a contrarian I instead found myself wondering about the catastrophic effect on the cosmetics industry, as the market for anti-aging creams would collapse.

I mention this because it was the inspiration for the title of this article, because at first glance it looks like the copper price is going to drop through the floor, yet on closer inspection there is evidence to suggest that it is instead going to stage a significant recovery rally, which supports our contention that there will now be some sort of recovery rally in the broad stockmarket.

When you look initially at the long-term chart for copper, it appears to be set to plummet to its 2008 crash lows at $1.25, and possibly even lower, but then when you look more closely at it, bearing in mind that its latest COTs look bullish, and sentiment towards it is in the basement, which is normally also bullish, it can be seen that is has arrived at the lower boundary of a potential major downtrend channel. It has actually gotten to this point in a relatively measured manner, without an all-out panic, which is why it is not more oversold on its MACD indicator.

As well as dropping to the bottom of the giant channel shown on its long-term chart, copper has also arrived at the bottom of the expanding channel shown on its 2-year chart, within a steeper sub-channel in force from last May. On this chart it is clear that it could rally all the way back up to the upper boundary of the expanding channel, which would take it to about $2.50 - $2.60, and still be within its bearmarket downtrend. On this chart we can also see that it has opened up a big gap with its 200-day moving average, as it had exactly a year ago, which lead to a sizeable rally. The same could happen now.

Other factors that increase the chances of an intermediate recovery rally include the latest COTs, which show that the Commercials have built up a big long position. They are normally right, while the Large Specs, who are habitually wrong, probably because they believe what they read in the papers, have built up a big short position.

Click on chart to popup a larger, clearer version.

The Hedgers chart, which is another form of COT chart, is also interesting to see here, because it shows the 2nd most bullish position setup since at least 2003.

Click on chart to popup a larger, clearer version.

Chart courtesy of www.sentimentrader.com

Sentiment towards copper is in the basement, as you would expect, with the 2nd most negative reading also since about 2003, as we can see on the copper optix, or optimism chart. This too suggests a rally.

Click on chart to popup a larger, clearer version.

Chart courtesy of www.sentimentrader.com

Finally, the 6-month chart shows that copper staged a minor recovery rally late last week to arrive at a resistance level beneath which a couple of candles with longish “upper shadows” formed, suggesting that it may back off a little early next week. Apart from that though, the other factors that we have looked at point to an intermediate rally developing. On this chart we can also see that the recent new low was not confirmed by momentum, which is another positive sign.

“Alright, so what?”, I here you ask – “There are few ways to play a move in copper profitably, so what use is this to me?” In the first place there is a big copper stock that is terribly beaten down and looks like it is set to recover, that we will have a look at on the site very soon. Because it is so terribly cheap, this stock could make a big percentage gain quickly, and fairly close stops can be set. Secondly, what we are seeing here has major implications for world markets at large, since if copper rallies it is most likely to do so against a background of recovering world markets, and that also means that oil is likely to recover as well, glut or not.

We will end with a quote by Benjamin himself:- “Our lives are defined by opportunities; even the ones we miss.”


| Digg This Article
 -- Published: Friday, 29 January 2016 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus

Web-Site: CliveMaund.com



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.