A Tale Of Two Charts (CAT, Copper)

The Market Ticker ^ | 4-2-2013

[blam]

A Tale Of Two Charts (CAT, Copper)

Karl Denninger
Market Ticker
April 2, 2013

This needs little explanation, really.

Simply put, CAT (Caterpillar) is almost-certainly right given Copper's (Dr Copper) view of the economy on a forward basis and the rest of the equity market is probably wrong.

Sell in May?

You might be a bit late by then.

[blam]

Hmmmm....

[sbMKE]

A little explanation might be helpful.

[blam]

"A little explanation might be helpful."

Companies buy construction equipment (Caterpillar) when they expect things to be growing and expanding.
The same with the price of copper...copper is called 'Dr Copper' because of its accuracy in predicting economic growth...when the price of copper is rising, things are growing.

With the price of both these items on a downward trend...don't be expecting a robust/growing economy.

[Gasshog]

supposedly CAT steers the market? We will see.

[bereanway]

FedEx is another very good proxy for worlwide economic activity. Just guided expectation lower for this fiscal year by roughly 8 percent and cut planned capex expenditures for the year by the same amount.

This thing is slowing rapidly with Europe leading the way and their stressed to the max banking sector about to kickoff a chain reaction meltdown.

2008 was just a trial run.

[junta]

Zimbabwe the hell hole had the best performing stocks market for awhile. Basically we shorts are fighting Bernanke’s easy money policy, the too big to fail banks that benefit from that policy and use HFT trading to goose the market and the uber stooges the public pension plans that have to buy SPY every two weeks. Imagine a Democratic party operative in charge of a public employee pension plan that he/she is going to sell and book profits or shift to more bonds? The cult would crucify that person.

[American in Israel]

Thanks!

[ckilmer]

Both charts look very cyclical—with most of their moves downward —already put in. So whenever the general market declines these two will already have put in their moves.

Can you go back over several past stock market declines based on a slowdown in earnings/manufacturing and see how far into their own declines were copper and catepillar and how soon after the market decline — copper and caetpillar turned around.

[Wyatt's Torch]

Copper peaked in July 2008 after big run-ups. Looks to me like it's just settling in to a tighter range. It could be trying to break out of the converging range but the big down moves before haven't necessarily been signals of impending doom. The sharp drop in 2011 began in late July just before the euro sovereign debt and the US debt ceiling crises.

[RedMDer]

Support Free Republic

[Vince Ferrer]

CAT + copper = Asia

[lucky american]

FedEx is another very good proxy for worldwide economic activity.

So true. The Postal Service has a contract with FedEx
Package delivery is way down.