Copper: 50 Years of Bull & Bear Markets An Analysis and Presentation of Bull & Bear Market Over 50 Years
Twelve years ago, the global copper market suffered its worst setback ever.
After peaking at $4.08 on July 2, 2008, copper went into a freefall that saw the price drop $2.83, or nearly 70% to a low of $1.25 just six months later.
From that low, copper subsequently rose $3.37, or 270% to reach a record high of $4.62 on February 14, 2011.
With the benefit of hindsight, we know the global financial crisis of 2008 brought copper to its knees, and, it is believed, the injection of trillions of dollars by central banks around the world to prevent the global economy from collapsing, enabled metal markets to recover, despite weak fundamentals.
Reflecting on these events, important questions arise, such as: should we have anticipated the price crashing as it did in 2008, or for that matter, expecting it to reach a new record high just two years later?
The obvious answer is that no one could have predicted either event with any degree of confidence, but chart patterns did alert us to the potential of important changes in trends.
In fact, over the past 50 years, we have seen similar changes occur under many different and varying market conditions.
This prompted us to examine the copper market on a daily basis, in an attempt to determine if in fact there were reoccurring patterns in price trends, regardless of influencing factors such as the fundamentals of supply and demand, inventory levels, economic and financial conditions, or geopolitical events.
Thus, by examining more than 12,600 price points from 1970 to the present, we identified, and isolated the 10 major bull and bear markets that have occurred, and incorporated ‘price contours’, as if they were guardrails on a winding road, that alert us to the potential of changes in trends.
Our approach is very straight forward, in that a bull market is comprised of higher highs and higher lows until that cycle is complete, which will then set the stage for a bear market to begin, when new highs are no longer achievable, and the route of least resistance is indicated by lower highs and lower lows. While bull and bear markets are typically identified by a 20% increase from low points, or decline from the highs, our analysis is guided by the absolute high and low price points of a cycle.
The two charts below illustrate a bull market commencing in 1993, and peaking in 1995, followed by a bear market that ran from 1995 to 1999. And to assist in navigating the longer-term trend, we simultaneously look at a shorter time frame to determine how the charts correlate.
If copper is important to your business, The Bull & Bear Market Analysis is a must have for your organization.
With this powerful tool, you will have 20 critically important charts for historical references, along with 50 years of daily price history. And by spending less than five minutes a day to enter the closing price, your charts will be completely updated, enabling you to clearly see what the trend is, and where the market currently stands in relation to that trend.
We’ve often said, “Let the market tell you what it wants to do”, and these charts go a long way toward achieving that goal.
If you would like an online demonstration of this invaluable tool, give us a call, so we can set up a time that is convenient for you to see firsthand how this unique study can help your business today, and every day in the future.
John E Gross