Copper 3 x 3

• Posted by Greg Harmon
• on September 15th, 2011

I had so many comments and e-mails from my post last week about Copper ($HG_F) as an economic tell (link below) that I feel it is important to clarify them with a discussion of Copper itself. Copper continues to confuse and befuddle, tiptoeing the tight line between holding support and failing. Below is an analysis in 3 timeframes, using three different sets of tools, 3×3.

Copper, Monthly Chart, Andrew’s Pitchfork

The monthly chart for Copper above shows both bullish and bearish indication. A look at the Andrew’s Pitchfork shows it pulled back to the Median Line of the green bullish Pitchfork. It move sideways to up along that fork until or unless the Upper Median Line of the bearish red Pitchfork takes control. A fall from the green fork could draw it quite lower to the Lower Median Line. The falling Relative Strength Index (RSI) and crossed Moving Average Convergence Divergence (MACD) indicator on this timeframe are suggesting downside to come. Strength from the Median Line but bearish indicators.

Copper, Weekly Chart, Elliott Wave

The weekly chart gives an Elliott Wave count that also brings some confusion. Is it still in an extended Wave (IV) corrective, or starting Wave (V). All this is happening at the site of major support and resistance at a price of 4.00. On this timeframe the RSI and MACD also suggest more downside to come.

Copper, Daily Chart, Fibonacci Levels

Finally the daily chart above shows the Fibonacci levels from the move higher off of the low in June 2010 to the high in February 2011. From this view it is testing support of the 38.2% Fibonacci retracement at 3.91 for the third time after traveling between the 23.6% and the 38.2% for the Month of August. It is also testing support at the range from 3.85 to 3.90 that has held since May and was significant in the 4th Quarter of 2010. The RSI and MACD on this timeframe also suggest more downside.

All three timeframes show significant indications of a pending downside move. Yet it has not happened and is holding support at every chance. Will this time be different and lead to a breakdown? Time will tell.

Copper Says the Markets Still Suck….Everywhere

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