The Commodity Specialist view – Early this year the prior steady uptrend from a late 2008 low was seen to falter at a key Fibonacci level. After an initial sell-off a strong bounce has unnerved the bears – there is still scope for a resumption of weakness, but the market is at a critical stage.
- COPPER – MONTHLY CONTINUATION CHART:
In late 2008 support was seen close to a long term 76.4% pullback level.
Subsequent recovery saw a test of the 76.4% retracement, with Jan producing a type of Key Reversal Month.
While the Jan high stays intact this negative signal remains valid – the current strong corrective bounce is not uncommon when a trend is in process of turning. - COPPER DAILY CHART – MAY-10:
The 76.4% bounce level on the daily chart was eroded after s/term resistance.
But while the 3.5500 early Jan high remains in place there is still scope for a bear scenario to unfold, keeping in mind the Jan reversal month.
At this stage a drop back through the 3.1600 support area would be an encouraging sign. Meanwhile we must await developments.
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