Copper bit of a bear marketHello, I see copper is in a bear market and a leg down could happen.
Not going to provide a full in depth analysis.
Here is a quick overview of this industrial commodity.
Here is the 30Y chart compared to gold you should notice a few things:
Copper could drop to 3.5-3.85.
3.85 is an extension of 1, 3.5 or 1.618.
Those extensions are really very common.
Gold bear market extended to 1.618 (for now):
Copper, assuming this is a bear market, is no stranger to 1.618:
The price extends 1 to 2 all the time.
Sometimes it does more than "correct" it makes a whole downtrend.
But it rarely does so (ever) without big retracements first.
The old saying goes "don't trade corrections".
Here this is something that repeats itself often so...
And in the short term there are nice enough trends.
I think trade corrections, but only if you are skilled.
Newbies that struggle in 3 year straight line trends...
Well of course they best stay away.
As long as you have strong hands but don't overstay either,
it should work out in the long run.
The inflation trade is sleeping. Ah lumber has dropped so much.
Too many people noticed it so they cut half the planet's trees.
It dropped so much. And it had gone up so much.
So much actually, that gamblers got caught up in lumber ponzis.
I don't see the US going hyperinflation or even 15% a year.
But people could buy commodities. In the short - medium term.
Better something that returns 0 rather than say a -8% return.
Disclaimer: I am long Soybeans and short Copper.
To look for in the following days (to my knowledge):
- China plans to release the state supply
- China plans to monitor (translation: manipulate) the market
- The US plans to "monitor" their economy (FED easing)
- China industry has shown signs of slowing down
Remember China buys half of the world Copper production (I think).
China had bad numbers in particular their industrial production dropped hard.
And As George Soros said, Housing Sector aïe aïe aïe.
Since they learned, to their surprise (somehow) they had a 1 child policy,
well there is no need for houses now is there? China doesn't take migrants either.
And the rural exodus has slowed down.
Economy contracts, demand goes down. Whole world contracts.
China and the EU follow Japan. The US follows the EU.
No reason for copper to go up. Supply is big an growing.
Demand has no reason to grow.
Only reason for the price to go up is inflation.
For now the USD goes up as silly as it seems.
Boomers worldwide all want to be safe.
Safe with the greatest ponzi scheme in history.
