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Copper Less Optimistic Than Stocks

Copper is often referred to as “Dr. Copper” with a Ph.D. in economics due to the metal’s ability to foreshadow future economic outcomes. Copper tends to confirm lasting bottoms in stocks. For example, copper bottomed in the fall of 2008, several months before stocks bottomed. Note the extremely bullish volume on the bottom right of the chart below.

Copper should confirm stocks

Compare the bullish read from copper in late 2008/early 2009 above to the present day chart of copper below. Copper remains in a downtrend. Copper tends to be a big winner after a lasting bottom in stocks. Today’s trading volume on JJC, the copper ETF, is on pace to cover only 50% of the volume seen on a typical day. If there was confidence in the current rally, the interest in copper would be much greater.

Copper should confirm bull markets

This entry was posted on Friday, November 11th, 2011 at 2:34 pm and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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