It Was The Ole One, Two Punch... July 5th, 2019 by John Gross
Copper took a hard right to the jaw last week, thanks to another 64,025 mt of metal being mysteriously dumped into LME warehouses in just two days, apparently when no one was looking.
We continue trying, without success, to comprehend how this logic defying feat is even possible. Whatever -
The second blow came with Friday’s job report, showing another 224,000 new positions were filled, prompting the dollar to soar, and metals to sour.
But Big Red withstood the pounding once again, and gratefully, it was back to the corner as the Ref ended the round, and the week, with a ring of the bell.
Remember Rocky ? He learned a lot from watching copper – you can knock him down, but inevitability, he will get back up again, bigger and stronger than before.
That said, although nonferrous metals were beginning to look a bit better a week ago, the last few days took a severe toll, with copper in particular facing another, yes another acid test.
The bar chart and the price & inventory chart both have Spot copper a bit too close to testing support right at +/- $2.63, making us nervous.
Further, a breach of this line targets $2.60, and if that fails to hold the critically important prior low at $2.55, is the next target.
There is no denying that things look tenuous at the moment, but other technical indicators, to include our weekly stochastics and momentum readings tell us there is reason to believe support will hold.
As they say “the game ain’t over, till it’s over”, and right now, it is too early to throw in the towel.
View Charts (PDF)