Sunday 3 March 2013

Copper indicating something ?

To most macro traders and investors, copper is one of the indicators of economic growth. It has topped at the beginning of 2011 and has been in sideways move since then. Although it looks corrective, last week's move broke the 4 years uptrend shown in red on the logarithmic scale. I use logarithmic scale when the prices move 3-4 times in a trend. The green small sideways triangle broke down although in uptrends, sideways triangles are seen as bullish setups. I thought it would break up but it didn't have the power and it broke down this week while breaking down the uptrend as well. It is a major move. However, this could lead to a larger triangle in blue. I expect it will touch the bottom line of the triangle before jumping to touch the upper line together with the support line of the red channel. If it disregards the blue triangle then there is a whole lot of space for the prices to go down further. 




Below, I will also show how the normal scale prices formed a major uptrend which broke down in Q3 2011. There is major difference between normal scale trends and logarithmic scale ones. I always check both of them especially in commodities.





1 comment :

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