Copper is Perking Up

Copper showed a spark of life and a sense of direction Wednesday. It broke above a 3 month symmetrical triangle, ending at the 100 day Simple Moving Average (SMA). The triangle itself it wrought with conflict as it is the summation of falling resistance and rising support. Pushing from two different directions. Many think that Copper is a stock market indicator and this conflict over the last three months illustrates the frustration of the market situation recently. So it is good news to see a break out. There is still a long way for Copper to go to prove that it is finally ready to move higher. It could very easily fall right back into the triangle, a failed breakout. In fact until it gets over

the 3.70 – 3.75 area there is no reason to put any faith in it continuing. But the signs accompanying the break out are promising. The Relative Strength Index (RSI) is rising and nearly into bullish territory. The Moving Average Convergence Divergence (MACD) indicator is positive and growing. The volume is increasing as it breaks out and on this whole leg higher. And if you look closely the Bollinger bands that have been squeezing are starting to expand. These are all positives. If it continues then the list of positive market indicators continues to grow adding weight to the bull market premise. At the moment it is up Thursday morning and it seems a touch of 1300 on the S&P 500 will happen possibly today. Needless to say a failure to continue higher and a move back to the bottom or the triangle or lower paints a gloomy market picture going forward. Watch this space.

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