Posted on 09/20/2021 4:15:58 PM PDT by blam
When Doc Copper speaks, investors should listen.
And it may be that time again. The price of copper broke above the $4 mark early this year… but it’s struggled to maintain its momentum and is in a multi-month pullback.
Today’s chart is a “weekly” chart of Copper. And as you can see, Doc Copper double topped just above $4 back in 2008 (leading to a 40% decline). And stocks followed the lead lower.
Copper then rose to new highs in 2011 but struggled to hold above the $4 mark. Is this happening again today?
Early this year copper tested those 2011 highs at (1) only to see sellers emerge. As well, Copper may be forming a bearish descending triangle while testing an important support at (2).
If support breaks at (2), Copper may fall hard. Will Doc Copper do all the talking for the market canary?
The term Doctor Copper is market lingo for this base metal that is reputed to have a "Ph.D. in economics" because of its ability to predict turning points in the global economy. Because of copper's widespread applications in most sectors of the economy — from homes and factories to electronics and power generation and transmission — demand for copper is often viewed as a reliable leading indicator of economic health. This demand is reflected in the market price of copper.
That last spike was due to restocking. It’s clear that the surge from reopening is over. Not necessarily meaningful if copper drops back down to $3.50 or even $3.
Evergrande has sold 1.5 million apartments it hasn’t built yet. If they have no money, they won’t build them, and they won’t need any plumbing supplies.
I don’t think the stock market crashed from 2010 to 2016, although this chart suggests that copper did. Maybe he’s referring just to the inflection points on that chart, but even that way I can’t make sense of copper’s asserted ability to predict sea changes in the market. It went down, but the market didn’t.
No relation to Doctor Pepper.
Good point. Markets overshoot to the downside and overshoot to the upside, same as in 2008 and 2010. You can’t claim the coming back to the normal range is some type of major warning.
bkmk
They probably use PVC or PEX anyway...
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