Copper Market: what is it signalling today?

Copper Market

The Copper Market tends to bottom and top before the Stock market. Hence examining the copper market can provide valuable clues in terms of market direction. Suppose the copper market tops after experiencing a strong rally. In that case, it should serve as an early warning sign that the stock market is in store for a significant correction.

inflation adjusted annual copper price USD

fred

The price of copper on an inflation-adjusted basis was higher in the 1915-1916 timelines than it is today. So much for the Hyperinflation, garbage theory. Having said that, copper is a leading indicator, so it tends to bottom and top before the markets. Looking at the current action of copper, it appears that copper has enough mojo left for one more sprint. This sprint could take it to the 5.10 to 5.50 ranges, likely coinciding with a multi-month top.

Hence the argument that the markets are likely to experience a more substantial correction in 2022 continues to gain traction. The markets have not experienced a robust correction for a while. They could shed 18% on the low-end and 24 to 27 per cent on the high end. The odds are that the trend will remain intact, and this strong correction will lead to the birth of an even spunkier bull. Or it could simply reinvigorate the current bull. The bull born after the COVID crash is a hybrid bull, and it will put up a mighty fight before it surrenders.

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