I last wrote about Copper one month ago,
But the other reason is prices are waiting to see if a US-China deal will be reached. Thus, the only way to play copper at the moment is to play the extremes and consider anything in the middle as equilibrium.
Whenever, I want to know where the Equity Markets are heading, I look to Doctor Copper. The term Doctor Copper is market lingo for the copper’s ability to predict turning points in the global economy. Rising copper prices imply demand or a growing global economy and declining copper prices imply lack of demand or a slowing global economy.
Copper prices have been under pressure in recent weeks due to China’s economy slowing and the continued drama surrounding the US-China trade war.
On Tuesday, the president continued to praise his trade war with China, saying that the 25 percent tariffs he imposed on $250 billion worth of Chinese goods would benefit the United States, and that he was looking “very strongly” at imposing additional levies on nearly every Chinese import.
Additional tariffs could be on the way. Mr. Trump faces a Friday deadline to determine whether the United States will proceed with his threat to impose global auto tariffs, a move that has been criticized by car companies and foreign policymakers.
What amazes me is the breakdown in price action in copper happened before Trump announced additional tariffs. Price broke the daily demand at 2.8335 with an extended range candle to the downside and has continued its downward onslaught.
The chart suggests price can continue to fall to the previous support/resistance line near 2.6000.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.