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As the mixed bag of economic news continues to roll in market analysts can't seem to agree on whether the world is headed for economic recovery or collapse. One thing most analysts do agree on however is that the commodity copper is typically a "bell weather" to the overall global financial system. There is an old trader's adage that says, "Copper is a metal with a PhD in economics. It tells you which way the economy is headed."
Despite poor consumer confidence numbers and a fall in orders for durable goods in the US, copper's trend appears, for the time being, to be a positive indicator for the economy. Today (7/28) High Grade Copper rose to an 11-week high and has given me a buy signal on the daily charts with both the 9 and 20 day simple moving averages pointing up. This is the second buy signal copper has given to me since its trend changed to the upside in mid July. Last week I also received a counter-trend buy on the weekly charts and I am now seeing a buy signal on the monthly charts suggesting to me that this uptrend in copper may be long term.
The rebound in Chinese equity prices has been particularly supportive and copper looks as if it's breaking out of the range it has been in for the past two months.
