Wednesday, November 17, 2010

Copper Takes a Hit

Copper is a very important industrial metal, used in practically everything. As such, it's price direction is very important. Here is a daily chart of copper:

Prices have broken the primary long-term uptrend (A). Over the last four days, prices have printed two strong downward moving bars (B). Also note the 10 day EMA is about to move through the 20 day EMA -- a bearish development short-term.

Right now, this looks like a standard correction. However, we're been hammered with China and EU problems for the last week. Both news stories are potentially longer-term bearish, meaning we have to keep our eyes open for continued weakness.