Copper futures have closely followed the trajectory of the zigzag that was outlined this summer in the post titled “Copper Fears Recession”. Below is a copy of…
that monthly chart to refresh your memory.
The majority of readers bet that the price would remain above $3. Within the same month, the price reached a valley of $3.13 and subsequently recovered. This vote is still valid as the price hasn’t crossed that handle yet.
In the next weekly chart update, we will examine the outlook further.
This is a closer look at the second red leg down shown on a bigger time frame in the summer. When the first leg up within a bounce in copper futures was unfolding, it looked promising at the beginning.
The hope has evaporated with the second leg up that has shaped a classic “dead-cat bounce” hitting only the minor 38.2% Fibonacci retracement level. It was close to touching the purple barrier of the moving average at the round level of 4, but failed.
This consolidation after the AB part was called the “BC” segment, and chances are high that was it, especially after the Fed’s Chair Powell revealed last week that “17 of the 19 [FOMC members] wrote down a peak rate of 5 percent or more, in the 5 range. So that’s our best assessment today for what we think the peak rate will be.” So it would seem another hike or two is in the pipeline.
The Fed still fears inflation rather than recession. The copper futures market is a barometer of…
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