Copper Relapse Confirms Peak/Reversal Count, Exposes Potentially Sharp Losses

October 13, 2016 3:33AM CDT

This market's clear, impulsive break below 06-Oct's 2.1455 initial counter-trend low confirms our peak/reversal count discussed in 05-Oct's Technical Blog and leaves yesterday's 2.1940 high in its wake as the latest smaller-degree corrective high and new short-term risk parameter this market is now minimally required to recoup to negate this specific bearish count.  Buy-stops intended to protect our recommended short from 2.1950 OB can be objectively trailed to levels just above 2.1940.

Copper 240 min

Copper Daily

The daily (above) and weekly (below) charts show the merely lateral, triangular pattern that has dominated this market all year.  In lieu of strength above AT LEAST 30-Sep's 2.2190 high and new key risk parameter, this lateral chop is considered a corrective/consolidative affair that warns of a resumption of the secular bear trend that preceded it.  This suggests eventual new lows below 18Jan16's 1.9355 low.  Market sentiment levels are mixed and won't inhibit a big move either way.

Copper Weekly

Finally, the monthly log scale chart below shows the magnitude of the secular bear trend from Feb 2011's 4.65 high and this year's puny recovery attempt that is hard to ignore as a merely corrective event ahead of a resumption of this major bear to new lows below 1.9355.  18-Mar's 2.3235 high and range cap stands as an obvious threshold the market needs to break to, in fact, break this major bear.

These issues considered, a bearish policy and exposure remain advised with strength above 2.1940 required to defer or threaten this call enough to warrant moving to the sidelines.  In lieu of such strength further and possibly accelerated losses should not surprise, including a run to new lows below 1.9355. Copper Monthly

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