Copper's daily and weekly charts appear to be forming an 11-week rectangle or ascending triangle, depending on how the boundary lines are drawn. A move and close above 274.40 would complete this consolidation pattern and establish an upside profit target of 300.
iPath Bloomberg Copper Subindex Total Return Exp 22 Oct 2037 (NYSE:JJC)
Buy, But...
I am willing to buy copper's breakout, but with a huge caveat. The market is coming off a period of all-time record spec-long and commercial-short positions (by a massive margin compared to the previous records). Normally I would shy away from buying a market with this COT profile. Yet, there have been rare occasions when a market is resolved in the direction of a record spec-long COT profile. In fact, the most outstanding example of capitulation by commercial interests occurred in in Oct. 2003 – the period with the previous spec-long and commercial-short record holdings (see red vertical line on the monthly chart). In that case, the market went straight up for 2½ years with prices quadrupling. Usually commercial interests are right – but when they are wrong, they are dead wrong.
