You’ll Never Take Me Alive, Copper!

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I've often heard it said how one commodity – copper – mirrors the equity market very closely. I took a look at this tonight, and since 2002, this has indeed been the case. Here is some recent history comparing copper, shown in black (on an adjusted continuous contract basis) with SPY, shown in blue.


One interesting thing I circled in the picture above is that copper called the market's bottom nearly three months in advance, by bottoming out on Christmas 2008. Equities made their final bottom on March 9 of the next near.

It's interesting to note the Fibonacci retracement levels of copper as well. I've circled the four major instances where copper seemed to head south after hitting the Fib level at about 3.75. Food for thought.