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Copper ETF (JJC) signaled softness was ahead back in 2008, as it broke down from a series of highs along line (1). Railroads lagged, yet confirmed broad market weakness was going to take place. Turning the page forward 3 years, Copper (JJC) created a series of lower highs along line (2). Rails lagged Copper again, then played a gain of catch-up to the downside.
JJC this morning finds itself on a very small shelf of support. A breakdown in JJC would be suggesting further softness in the Rails, BROAD MARKET, FCX and Silver (SLV). As usual, keep a close eye on the price action of Copper/JJC for bigger macro messages.
Two weeks ago the “Power of the Pattern” was suggesting that FCX and IYM were hitting a key hurdle of resistance (see hurdle post here) At that time FCX was trading at $46.73 per share, this morning it is in the $41 range. The pattern at hand was suggesting the counter trend should be about to end. I remain of the belief that FCX, JJC and IYM are worth watching for Macro/Bigger picture messages.
Copper is a most reliable indicator. This, with all the other supporting financial problem information, both here and abroad are an augery for, “lookout below.”
Silver is primarily an industrial metal. If copper drops, industrial demand is down. If industrial demand is down, then demand for silver is down. SLV would drop if copper drops.
Apurv…would think at least a 38% Fib correction of the big move would be in the cards!
Hey chris ,
I suppose the support line 3 in broken , what would be the target ?
this support looks weaker than the resistance on the dollar right now, but it seems if the dollar goes any higher, copper will see a repeat of 2008 🙁
using the indicators i have JJC on a weekly chart looks precarious and could drop an easy 15%. what is the correlation with SLV that you mentioned?