Monday, February 9, 2015

Copper Technical Market Analysis

Last time we covered the beast metal market Gold. Today we will show our technical top down perspective on Copper (Cash Market). We are going through the various chart time periodicities to get a feeling for the overall market context and the path of least resistance. To accomplish this we are using the simple concepts of AMT (Auction Market Theory) and the understanding of balance and imbalance.

With that said, let's start out with the monthly bars chart that is one time framing lower since 6 months. The actual new month is an inside bar so far. There is plenty of air to the downside but we are identiefied a potential support level that is marked on the screenshot below. We'll see what will happen here.

Moving forward to the weekly bars chart, we can see a possible forming of a balance area as the previous week ended the one time framing lower behavior that occured since several weeks. A break above this bracket area could lead us finally to higher prices. However, the macro is still imbalanced to the short side, so we'll see how the market will react in this area.

With installed Exponential Moving Averagea (EMAs), we can observe a rotation back to the "month's average" (5EMA). The market stopped its move to higher prices at this level. Short-term as well as long-term trend is cleary bearish to the downside. Macro selling imbalance cleary visible currently with this tool:

The daily bars perspective showing us some deeper informations to work with. The market shows a balanced behavior and moved back into the previous bracket area. A resistance area inside of this balance area is marked and could lead the market to the bracket low. A potential break of this low should lead us to the next possible support level:

As with the weekly bars chart we should consider a look with EMAs here as well. The market broke the first two short-term EMAs and got rejected by the 20 EMA (green line). So we have possible support at the week's average (5 EMA). Bearish long-term trend is still intact.

With this quick analysis and the state of the market we could conclude a possible move towards to the downside. Anyway, as usual everything is possible and we should be open minded for other possible scenarios as well as using some other analysis tools to better understand the told market story.

Stay happy because success is only a habit!

All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.