Buyer signal: a bullish outlook
Yesterday I also wrote about copper. The latter served as the canary in the coal mine – it was the first asset that debunked the H&S pattern and what I expected became reality:
Interestingly, copper has already reversed its breakdown below its head-and-shoulders pattern in terms of daily closing prices. Because copper often moves in line with the precious metals sector, this is a bullish sign – not just for copper, but also for gold, silver and mining stocks.
What does it all mean? It means the precious metals sector is likely to move higher in the near term, and the same goes for copper. Yes, the latter has currently encountered a descending resistance line, but since it is so highly (and negatively) correlated with the USD Index, I still think that a new move lower in the USDX will trigger a new move higher in copper.
Keep in mind that just as December’s rally took copper above the falling resistance line that existed at the time, we can have the same thing now, and it can be followed by the same kind of action. Another wave lower. In fact, in my view this is the likely outcome. The rallies in PMs, mining and copper, like the rally in the USD Index, are corrections and not the most important medium-term moves in those markets.
Finally, we’re hosting a webinar this Thursday (10:30 AM EST, which is 4:30 PM CET and 7:30 AM PST) with Rick Ackerman and I invite you to Rick’s, Dominik’s (our content director and host of the webinar) and myself to join in to participate.
The webinar is free and the goal is to provide real-time value. Rick’s approach is generally more short-term focused than mine, while in his he focuses on gold and bitcoin premium newsletter about Golden MeadowDuring the webinar he answers questions and requests to quickly analyze other markets or shares. So again, you are cordially invited – please reserve your seat today.