I have another chart for you. This is the daily action of the weekly continuation of the Copper. I’m showing you the daily version so you can appreciate the finer detail that goes missing if I only show you weekly bars. This is what the longer term players are thinking. This sequence covers last year’s low to this year’s high and back. What is so devastating about this chart is that if look at A where you can make a case for short covering on the first sequence off the low, you can see that the end of the rally was a consolidation just above A. What that means is polarity tried to flip where former resistance could’ve become support. The tragedy is that it failed. So the buyers who came in January are gone. Now all that’s left is an area of short covering. The difference between a chart like Copper and the SPX is Copper never took out its 2011 high like equities. What that means is you can build a case we are still in the same bear market in Copper since the 2011 high. The only thing holding us up at this point is a vacuum not of buyers but where sellers declared their intention of taking profits. The likely outcome here is Copper traces all the way down to the 300 area. The 200 week moving average on this chart is 321 so that’s a given.
So maybe that’s for the best given if we can get a bounce going this week, it could bounce off 321, hold on a few days and perhaps make a serious low after the 15th when the VIX is likely to be on the cusp of nosebleed territory.
There’s a lot at stake, this time it happens to be the future of the country. When we get employment numbers like these 3.5 years into a Presidency, odds increase that management fires the coach. As a social observer, if the market for whatever reason bottoms in June the incumbent still has enough to recover. But if the market stays bad throughout the entire convention season I think they will change the coach.
Click charts to enlarge