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Jim Wyckoff

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“Dr. Copper’s” prognosis on raw commodity sector

March 9, 2022 by Jim Wyckoff

With the Russia-Ukraine war intensifying along with marketplace uncertainty and anxiety, and with both countries being major raw commodity producers and exporters, it would seem raw commodity futures markets’ prices still have more room on the upside—even as many raw commodity markets are at multi-year and even record highs. However, there are some early warning signs the explosive gains in commodities may be close to peaking. Remember that futures markets incorporate into their prices’ structures all known and expected fundamental factors. The copper market, called by traders “Dr. Copper” because of the red industrial metal’s worldwide importance and its history of foretelling price moves in other markets including stocks, on Monday soared to a record high above $5.00 a pound, only to promptly reverse course and close sharply down on the day. That price action produced a big and bearish “key reversal” down on the daily bar chart. That’s one technical clue of a price top in a market. Neither I nor anyone else knows when major market tops occur. However, this market watcher of nearly 40 years has seen his share of major market tops, and they occur in situations similar to what many commodity markets are experiencing now. The majority of major market tops occur when traders and investors least expect them and many times before the actual bullish fundamental event that sparked the bull market move ever fully plays out. Stay tuned! —Jim Wyckoff

Filed Under: Blog News, Jim's Morning Report, Uncategorized

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There is a risk of financial loss in futures and options trading. Futures trading is neither easy nor an easy way to make money. It takes hard work to have success. Please use sound money management when trading futures. Past performance is not necessarily indicative of future results. Nothing on this website is intended to be a trading recommendation to buy or sell futures or options. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed. Readers are solely responsible for how they use the information on this website.

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