Copper Update: Bottomed?

Aibek Burabayev - Contributor - Metals

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

Comparative Chart of Copper and Oil
Chart courtesy of

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?"

Copper Update: Metal Signals Short Term Bottom For Oil

Aibek Burabayev - Contributor - Metals

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

Copper-Crude Oil Comparative chart
Chart courtesy of

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"

Copper Update: "Black Gold" Is Too Wild

Aibek Burabayev - Contributor - Metals

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"

Copper Update: Crashing Crude Oil Lures Down Melting Copper

Aibek Burabayev - Contributor - Metals

In my previous Copper update in September, I proposed readers to cover shorts in Copper ($2.32 level) and to watch Crude Oil for further clues as the “black gold” rocketed for a worrisome $10 in 3 days while Copper was quietly sleeping, unaware in its sideways “bed”. Indeed, the metal started to elevate with a two-day gap following Crude Oil, confirming that the signal was valid, and Copper reached $2.5.

Crude Oil Daily Chart: Bears Have Attacked and Bulls At Halfway

Crude Oil Daily Chart
Chart courtesy of

Let’s start from the leading instrument’s chart above. Last time, I assumed that Crude oil should have reverse down ahead of the downtrend touching a point at $53 and it reversed earlier than I expected – just below $51. This was due to huge selling pressure in the market. Continue reading "Copper Update: Crashing Crude Oil Lures Down Melting Copper"