by Greg Harmon
Many use Copper as a tell on the future direction of the market. So what does
Copper say about the current market? Using the iPath Dow Jones-UBS Copper
Subindex Total Return ETN, $JJC, it
is not a pretty picture. The chart below shows that it is testing support at 51
for the fourth time
since May. And as it does the Relative Strength Index (RSI) has rejected at
the mid line and is heading lower and the Moving Average Convergence Divergence
(MACD) is about to cross negative. Translation: On support but set up to go
lower. But the US is not the only place in the world that uses Copper. China is
supposed to be a growth engine. What doe Copper look like priced in Yuan? The
ratio chart below translates the $JJC into
Yuan using the WisdomTree Dreyfus
Chinese Yuan Fund, $CYB. This is also testing support, with
deteriorating technicals. Hard to say that the Chinese are drag the world out of
the economic morass from looking at the demand for Copper in Yuan. But what
about that block of people in Europe working and trading together as an economic
unit? The ratio chart below of the $JJC
against the the Currency Shares Euro trust, $FXE,
translates Copper into Euro. Although it has been in an uptrend for two weeks
and now holding above the gap support at about 0.375, the RSI and MACD are
pointing to a move lower. Perhaps it will also move back to test support at
0.36. Nothing strong about that.
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