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When Crude Oil was trading “above” $90, the Power of the Pattern suggested that the most important commodity on the plant could trade at least down to $70, due to this important pattern. (see post here)
Joe Friday shared a few weeks ago, that if Crude were to break below this long-term support line, it could then fall to the $35 zone (see post here)
The above 2-pack takes a look at Crude Oil and Copper. As you can see, both of them are testing support line (1). Each of these lines lows took place over a decade ago.
So far the decline in Crude Oil and Copper has been totally dismissed by global equities. Will stocks continue to stay strong if these long-term support lines are broken by 5% to 10% below current prices?
At this time, support is support until broken!
In my humble opinion, I feel stocks could end up in trouble if selling pressure picks up on a solid break below support lines (1).
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Copper looks to have created a “Bearish descending triangle” The measured move off this pattern is suggesting Copper could fall around 30% should support give way. This is the same pattern that suggested Silver could fall to the $15 level, when it was trading above $30. (see post here)
Thanks for question and viewership, Chris
Chris, if Copper breaks below $2.91 what is the next (lower) most likely support level?
Thx for the comment/question. Is Golds strength a warning sign for stocks? That is above my pay grade. For sure money flows from asset to asset. As Silver was losing two thirds of its value and Gold one third, did some of that money flow to stocks? Could have! The Power of the Pattern is seeing some positive conditions in the metals complex of late, that we haven’t seen in a long time! Could be the start of something good for sure. Full disclosure… Metals members went long SLW on 11/6 @$17.89 per share. So far, we feel blessed and lucky by the gains. Thx for your viewership, Chris
Chris, While oil and copper have been falling, gold is having a nice rally. Is gold’s recent strength another warning for equities? And is gold telling us anything else?