Tag: Crude Oil Vs. Copper

If you have read my last update on this metal, you should be aware of a recent miscorrelation between the two core assets. You will see in the chart below that my bold expectations for a rapid recovery of oil didn't come true.

Chart 1 Copper-Oil Comparative Illustration: Investors Choose Metal Over Oil

Chart courtesy of tradingview.com

Neither the first interim low in the middle of December nor the second low in the middle of January could make the much anticipated V-shape rocket reversal. The main reason for that is the oversupply of the oil market. There are rumors that OPEC will soon reach a deal with Russia to cut production for their mutual benefit. This, of course, will cause the price of oil to rise. I think this is a temporary measure and after the short-term rise we will see the price of oil drop again, but it could take some time happen. Continue reading "Copper Update: Bottomed?" →

In my previous update, I recommended covering your short positions in Copper to save a decent profit from the sudden reversal. The next day the price dipped further down to a round figure favoring buyback. Then until today, we saw volatile sideways trading inside of the 2.025/2.125 range. Currently, the metal has traded on the upper side of it. In the meantime crude oil has plummeted to an 11-year low and the two assets have diverged sharply since.

Chart 1: Copper-Crude Oil Comparative chart: The Chain Has Been Broken

Chart courtesy of tradingview.com

The days following my last Copper/Oil post, Crude oil moved $2 higher as expected, but it couldn't close above the $44 mark and the oversupplied market brought the price down sharply. Despite that, Copper stood still charting a sideways pattern and expanding the triangle. Supply cut fears amid a weakening US dollar have spurred demand for the metal. Continue reading "Copper Update: Metal Signals Short Term Bottom For Oil" →

Last time I shared with you a clear signal from Crude oil to short Copper for a good dip down. Oil has dropped as foreseen from the $47.7 level. That's down a good $8 (17%) and it dragged Copper down along the way. This confirms Copper's tight relationship with Crude oil. Copper plummeted for a nice gain from a short position which has reached .35 (15% smaller than from Oil short) on Friday's low ($2.03). My original targets haven’t been met in both instruments ($ 37.7 Oil and $1.9 Copper), and that is why I would like to discuss my concerns with you.

Again we will start with the leading instrument in my regular cross-instrument analysis. Continue reading "Copper Update: "Black Gold" Is Too Wild" →