Dr. Copper

By: Ed Carlson | Tue, Jun 10, 2014
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In March I wrote two columns about copper. On Friday, March 7 copper broke support at 3.20 and in my column, the following Monday, I wrote that my price target was 2.96. The following week I wrote that "The Coppock Curve has reached a level seen at previous bottoms in copper. Given the proximity of last week's low (2.93) to my price target and the explosion of volume in the copper ETF, JJC, I'd say that was the bottom of the decline in copper."

Since that time the price of copper endured a slow grind upward until encountering resistance at 3.20 (support turned resistance) at the end of May. Last Wednesday copper gapped down 1.65% and, after hesitating at the trendline on Thursday, broke through it on Friday to close at 3.053.

At this point, if copper breaks 2.95 (and that remains to be seen) my price forecasting model will generate a price target as low as 2.62 - 14% below Friday's close. Copper is known for its ability to forecast the broad economy, hence the moniker "Dr. Copper - the metal with a PhD. in economics". If copper plunges to new lows, that can't be good news for the economy.

Copper Chart
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Ed Carlson

Author: Ed Carlson

Ed Carlson
Seattle Technical Advisors.com

Ed Carlson

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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