How is Dr. Copper doing? Analysts view the price movement of copper as an indication of growth in the world. Copper is in demand at industrial and residential building projects and for production at factories. If the price of copper is in decline, it means that demand is lower because of lower production and building from the end users of copper. In the end it is an indication of the spending power of the global consumer.
Well what is it saying?
A textbook "rising wedge" pattern (red dotted lines) warned us of the crash of 2008. The market recovered to break out to a new high above line -1-. The price pulled back last week to test support at line -1-. A negative divergence on the short-term oscillator (Stochastic) warned us of the impending correction. However, there is no negative divergence on the longer term oscillator (MACD Histogram). This tells us that the price of copper is still in a longer-term uptrend. The stochastic indicator is in oversold territory on the weekly scale. As such it is giving a buying signal in a longer-term bull market.
Dr. Copper had a light sneeze but generally, he is in good health!
