Copper is probably the most watched of the commodities for those with a macro economic bent; we’ve outlined in countless pieces its label as “Doctor Copper” as a marker of industrial health. Hence its recent pullback in price had caused some concern….. Rather than a copper ETF, the company Freeport McMoran & Gold (NYSE:FCX) - which is mostly a copper company despite the name – has become the de facto instrument of copper speculation by the fast money crowd, especially of the hedge kind. You can see the stock fell off sharply over the past month. FCX (NYSE:FCX) is now either dead cat bouncing or about to embark on a larger move up, mostly (it appears) based on the new hot thesis – that is “Japan rebuild”. Nevermind we are not even at “Japan containment” yet… speculators need a hot theme, and this one sounds lovely. Remember, in the market – at least in the shorter run – a thesis need not be correct, as long as enough people believe in it and drive prices en masse in the same direction. Keep an eye on this name, because if it breaks over this next level of resistance the fast money crowd will begin to cluck everything’s back on track. Too soon to tell where it is headed as it’s still in the “making lower highs” mode. Despite the historical “Doctor Copper” label, I’ve contended that like most commodities, copper prices are now more an indication of whether China is sucking it up in “huge” quantities or just “large” quantities – rather than a signal on global economic health - as that country has become the world’s marginal buyer. Perhaps China is successfully slowing down its economy and/or prices finally reached a point where “no mas” was in order. The WSJ has an article on how copper prices have now reached a point a substitution effect with aluminum is now possible.

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