From Taki Tsaklanos: Copper prices were very bullish in the last 2 months of last year. We covered the copper market extensively since then, and our observation was that the copper market needed a bit of time to choose a direction (higher or lower).
Our viewpoint was that the price of copper should remain at least one week above $2.60 in order to call for a new bull market. We made that statement in December, in this article The Copper Market: Moment Of Truth For Investors. We are following up on that call in this article, with the same but actualized version of the chart.
The copper price chart looks special to say the least. We would say it looks spectacular. Why? After a retracement until around the price level we forecasted (slightly above $2.40), the price of copper is now trending higher … and it is again attempting to break outside of its bearish trend. The chart below makes the point.
We remain firm on our call that the copper price should remain at least one week above today’s price level. Also, the copper price behavior around its December top ($2.80) will be very telling.
If copper enters a new bull market, we expect to see a very sharp and aggressive rise in copper in the first months of 2017.
The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (NYSE:JJC) was unchanged in premarket trading Thursday. Year-to-date, JJC has gained 4.14%, versus a 1.60% rise in the benchmark S&P 500 index during the same period.
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