Wednesday, October 31, 2012

Just how low can Copper go?

Last week December 2012 Copper opened at 3.6375 and closed at 3.5500. While new home sales did show an increase in September 2012 building will slow down as winter weather approaches here in the US lowering demand for copper. Also if we see continued global economic weakness in Europe and Asia that will also have an effect on demand.

On the daily chart below you can see that ADX reflects increasing strength to trend as the numbers rise now at 31.6. MACD is bearish and Stochastics are in deep oversold territory. You can see the two "red vertical lines" highlighting technical trade signals from one of the tools at Trends in Futures called the TS Analyzer. When the first one showed up I mentioned to wait for a solid break below 2.7000 in my video commentary. The break took place on the second red line on Oct 19.

On the weekly chart you can see weekly ADX reflects increasing strength to the weekly trend with numbers rising now at 33. Weekly Stochastics are mid-range and coming down. On the COT Disaggregated report Producers had a slight drop to net shorts now -51,488 contracts. Managed Money had a slight drop to net longs now at 18,067 and Swap Dealers had a slight increase to net longs now at 45,586 contracts. With today's price action and a continued posture for weaker prices by big money we could see a test of 3.4500.





 
 
 

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