Copper 02 (Nov 12 - Dec 25)

[winston]

Copper Inventories Rising by Tom McClellan

http://pragcap.com/copper-inventories-rising

[winston]

THE UGLY COPPER SITUATION GETS WORSE

The ugly situation in copper just got a little uglier…

Over the past few months, we've mentioned the slide in copper prices several times. Copper is one of mankind's key building ingredients. It's in nearly everything around you… from cars and refrigerators… to homes and locomotives.

Because of this "in everything" quality, copper rises and falls with global economic activity.

Like most every asset, copper was hammered in the 2008 credit crisis. It then enjoyed a big rebound rally that took it from $1.27 per pound to $4.60 per pound. But since early 2011, copper has gradually declined.

As you can see from the chart below, copper's decline is getting worse. This week, the metal dropped to its lowest point since late 2011. As we mentioned last week, this decline by itself isn't a big red flag.

But it's a potentially worrisome development. This big decline needs to reverse itself… or it will turn into a major red flag for the global economy.

Source: Daily Wealth

[winston]

Bad News for Copper Bulls by Jason Jenkins

Source: Investment U Research



http://www.investmentu.com/2013/April/b ... bulls.html

[winston]

The Bronze Swan Arrives: Is The End Of Copper Financing China's "Lehman Event"? by Tyler Durden

In all the hoopla over Japan's stock market crash and China's PMI miss last night, the biggest news of the day was largely ignored: copper, and the fact that copper's ubiquitous arbitrage and rehypothecation role in China's economy through the use of Chinese Copper Financing Deals (CCFD) is coming to an end.

http://www.zerohedge.com/news/2013-05-2 ... hman-event

[winston]

Smart(er) money betting on copper

The terrific Asbury Research recently featured how commercial hedgers have made a huge bet on copper.

Although some may disagree, it's generally accepted that in the world of futures, commercial hedgers tend to be the smarter money.

Granted, much of their smartness or ability to be more right than wrong comes from simply being on the other side of trades that tend to be more wrong than right.

In the zero-sum game of the futures market, commercial hedgers are frequently on the opposing side of an increasingly popular trade, and as we know being contrarian is very often a winning strategy.

http://chartsetcetera.blogspot.com/2013 ... opper.html

[winston]

The Ugliest Chart in the Market By Jeff Clark

It has been a rough year so far for copper…

The metal is down 20% in 2013. And it looks like it's going to get worse…

Below, you'll find a chart of copper's price action over the last 12 months…

As you can see, copper bottomed in late June. And in the following weeks, the metal put together a series of higher highs and higher lows. This bullish pattern gave long-suffering copper bulls a glimmer of hope. But that glimmer got snuffed out last week when the copper price broke down again, and the chart violated its rising support line.

Copper now looks set to retest its June low around $3.05 per pound, or worse.

The last time we looked at copper, in March, it traded around $3.40 per pound. I argued that the metal should decline to $2.80. Here's an updated look at the chart I showed you back then…

As you can see, the recent bounce off the $3.05 support level looks pathetic. The metal couldn't even rally back up and challenge its previous support level (now resistance) near $3.40. With copper displaying such poor price action, it's unlikely to survive another test of support at $3.05. That brings the $2.80 price target into play.

This isn't the worst news for copper bulls. Let's look at the weekly chart of copper…

This could be the ugliest chart in the market right now. You can see how important the $2.80 price level is. If copper falls below that price, there isn't much support until the $2.20 price level.

Stock-market investors should pay attention to the price action in copper. Stocks and copper are both viewed as leading economic indicators. They rally in advance of an upswing in the U.S. economy, and they fall in advance of a contraction.

But today, these indicators are telling two different stories. Stocks are rallying right now, and copper is falling. This divergence rarely lasts long. Either copper needs to rally to catch up with the gains in the S&P 500, or stocks need to decline to come back in line with the action in copper.

Given how bad these charts look, I wouldn't count on copper playing "catch up" any time soon.

Source: www.growthstockwire.com

[winston]

Copper Touches Six-Month High as Inventories Continue to Shrink

Copper reached a six-month high in London as manufacturing continued to expand in China, the biggest consumer of the metal, and inventories shrank further.


Source: Bloomberg

[winston]

Copper shifts into a downtrend… prices fall to a seven-month low.

[winston]

The One Question Investors Must Ask Themselves Right Now By Jeff Clark

Just about every commodity on the planet has exploded higher this year.

But copper has been a dud. The metal is down 14% so far in 2014.

And the lagging price raises a larger concern about the state of our global economy.

Let me explain…

The last time we looked at copper, I called it the "ugliest chart in the market." It looks even uglier today…

Please Enable Images to See this

Copper has broken down from an ascending triangle pattern (the blue lines). And it has broken below a critical support line going all the way back to October 2011.

It looks even worse on a weekly chart…

Please Enable Images to See this

Copper looks poised to test the 2010 support line down at $2.75 per pound. If that fails to hold, the next downside target is $2.25.

Yesterday, Matt Badiali wrote about using the weakness in copper as an opportunity to buy beaten-down copper producers. They're trading at super-depressed valuations. I don't disagree that copper-mining companies are cheap. But given how ugly the chart of copper looks, I'd prefer to see the metal show some strength first – and perhaps rally back above $3.10 per pound – before bargain hunting in the sector.

But the larger concern isn't the lagging price of an industrial metal. It's what that lagging price says about the state of the global economy.

Copper is a leading economic indicator. It rallies in advance of economic strength and it declines ahead of contractions.

For years we've been told that the coordinated efforts of the world's central banks are creating growth and prosperity in the global economy. But copper is telling a much different story.

The price of copper has fallen 33% over the past three years. And it looks like it's on the verge of another major move lower.

Up until recently, we could have pointed to the general downtrend in prices over the past three years and dismissed the action in copper as part of the commodity bear market.

But we can't do that now. Gold is up around 13% this year. Silver is up around 10%. Oil has rallied around 8% from its January low. Natural gas exploded higher last month. And agricultural commodities are up 20% or more in 2014.

In other words, all of the commodities that are the most sensitive to the velocity of the money supply (how quickly money is moving through the economy) are screaming higher. Meanwhile, the one commodity that is most sensitive to economic output is on the verge of collapsing.

That's strong support for the argument that the stock market rally of the past few years has been the result of central bank money-printing policies and not robust economic activity.

The question investors have to ask themselves now is: What happens to the stock market if the Fed follows through with its plans to taper its Quantitative Easing program?

To get the answer… just take another look at the chart of copper.


Source: Growth Stock Wire

[winston]

Copper continues its ugly downtrend… prices break down to a three-year low.