Technicals | Apr 22 2013
Bottom Line 18/04/13
Daily Trend: Down
Weekly Trend: Down
Monthly Trend: Down
Technical Discussion
"Yet as soon as the Wave-A low is broken below circa 328.25, we can kiss both of these goodbye, and purely focus on the flatter pattern only. A pattern that is likely to fully test the significant support line just above 300.00.' Well, the proposed triangle patterns have since failed and here we are. Looking well and truly down the barrel at the aforementioned significant support line. Metals are certainly under an immense amount of pressure. Be it Copper has been showing its hand right from the start and over the last couple of years. It has been weak and hasn't been faking towards anything to the contrary. It's now a matter of seeing whether support holds, and the double three corrective pattern for the higher degree Wave-(B), that we have been presenting on these pages longer term, unfolds as expected. Or turns nasty in similar vain to what we have seen in markets like Gold and Silver over the past week. No doubt Copper is well and truly under the hammer here.
The double three corrective pattern has been our choice longer term. An A-B-C zig zag pattern, followed by an 'any three' Wave-X with the choice of either a triangle or flatter A-B-C move completing the formation. The triangle option has failed so here we are watching closely to see if the flat holds strong, or whether a nasty break below support and the psychological 300.00 price area unfolds. A convicted move below 300.00 will likely have serious bearish consequences. Not something we wish to see yet something we definitely need to remain open to. Wave-A vs Wave-C equality targets 304.85, so this is basically our focus for the moment. Volume over the past 3 trading sessions has been well above average so this weakness is clearly being tested. Yet we do have some strong Type-A bullish divergence still in play here that has yet to trigger. And support and divergence in combination are generally very powerful forces in turning prices around. Yet these are very unusual times. Global markets in general are without doubt at the most critical juncture seen for some time. And to be honest it really could go either way.
Trading Strategy
This is certainly not the place or the time to be jumping in on a trade in either direction. We continue to sit with our bigger picture bullish stance, yet a drop below 300.00 is going to put that view well and truly on hold. So the safest place to be during major decision making points such as this, is on the sidelines. We don't have a crystal ball, yet price is clearly throwing signals at us aligning that a cautionary approach is the best approach over the coming weeks. So that's exactly what we are going to do until more clarity can be presented to us.
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