ChartWorks: Copper - Now the Cascading Waterfall

By: Bob Hoye | Fri, Sep 16, 2011
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The following report was published for our subscribers September 9, 2011


 

Copper ended August with a bearish outside reversal bar (a higher high, lower low and a close below the previous month's low). This also completed the anticipated bearish setup in the RSI(14) by having August take out the May low after July put in a lower high than February.

The rollover of the 20-week average and the MACD crossing its average confirmed the sale. Look for this top process to be followed by a cascading waterfall. A minimum drop of 30% (targeting $3.20) can be anticipated, however something closer to 40% ($2.70) would be normal.

Major base metal producers (BHP, RIO, FCX & TCK) continue act poorly with the 50-day and 50-week averages capping the last four week's highs. It is now time to lower our sights and monitor the 20-day averages as the new resistance.

The last five sell signals in copper saw BHP decline by 74%, 27%, 24%, 29% and 12% from the high.

Various related bearish ETFs and options are available; BOS, BOM, JJC, HKD.TO and HMD.TO.

Copper Chart
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Weekly and daily charts

Copper Chart
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Weekly charts from failed monthly RSI tops.

Arrows identify the bearish rollover in the 20-week ema or crossover of MACD

Copper Chart
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Copper Chart
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Seasonality favored a topping process with a failed high in September and a hard decline to follow.

Copper Chart
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BHP Billiton, Rio Tinto, Freeport McMoran and Teck Resources
BHP Billiton, Rio Tinto
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Freeport McMoran and Teck Resources
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Technical observations of RossClark@shaw.ca

Link to September 16th 'Bob and Phil Show' on Howestreet.com: http://talkdigitalnetwork.com/2011/09/shooting-rapids/

 


 

Bob Hoye

Author: Bob Hoye

Bob Hoye
Institutional Advisors

Bob Hoye

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

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