Copper just exploded higher in a very impressive move - near the highs. Could this be the beginning of a big run higher? Perhaps ... let's face it, it certainly is feeling that way from an 'emotional' perspective. However, as Mr. Larry P taught me - trade what you see, not what you believe - so why I don't actually trade copper, I do watch it as an important economic barometer. On that note, today was relatively flat but the XLP/NYA actual went down and if equities were topping then we expect the ratio to be doing the opposite. It did not ... imagine a world where Copper blows thru the patterns shown below AND the XLP/NYA breaks to new lows. That would be THE ideal situation. But, for now, I wait ... the ratio is a very powerful tool - with the patterns - so until we get a weekly close below that 15 year support, I'm not going long equities.
Copper might help us foresee the next move of the ratio .. will it smack into the resistance area shown, which is a projection equal in both PRICE AND TIME and start to fall? Or, will it pause for a bit (expected), consolidate and then explode higher ...? Certainly "feels" like the Copper SELL PATTERN is going to fail and Copper prices are off to the moon doesn't it? Well, that's what I believe. What do I see, a MONTHLY price projection equal in both price and time ... those don't fail often.
