Copper Says the Markets Still Suck….Everywhere

• Posted by Greg Harmon
• on September 13th, 2011

Many use Copper as a tell on the future direction of the market. So what does Copper say about the current market? Using the iPath Dow Jones-UBS Copper Subindex Total Return ETN, $JJC, it is not a pretty picture. The chart below shows that it is testing support at 51 for the fourth time

since May. And as it does the Relative Strength Index (RSI) has rejected at the mid line and is heading lower and the Moving Average Convergence Divergence (MACD) is about to cross negative. Translation: On support but set up to go lower. But the US is not the only place in the world that uses Copper. China is supposed to be a growth engine. What doe Copper look like priced in Yuan? The ratio chart below translates the $JJC into Yuan using the WisdomTree Dreyfus

Chinese Yuan Fund, $CYB. This is also testing support, with deteriorating technicals. Hard to say that the Chinese are drag the world out of the economic morass from looking at the demand for Copper in Yuan. But what about that block of people in Europe working and trading together as an economic unit? The ratio chart below of the $JJC against the the Currency Shares Euro trust, $FXE, translates Copper into Euro. Although it has been in an uptrend for two weeks and now holding above the gap support at about 0.375, the RSI and MACD are pointing to a move lower. Perhaps it will also move back to test support at 0.36. Nothing strong about that.

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