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One of the interesting things about commodities is their adherence to time cycles, meaning they tend to cyclically bottom in a periodic way. The most common cycles are 8 or 9 year cycles which are evident in several different commodities. Indeed, theres good analysis that suggests a 16-18 year cycle for Real Estate. So, its worth noting that Copper also exhibits some cyclicality. Notice the way it tends reach cyclical lows every 8 years. It also appears that there is a more pronounced 16 year cycle. Time Cycle analysis does NOT call the tops of cycles--its only good for giving ideas about bottoming periods. It looks like we wont get our next major bottom (buying opportunity) until Late 2017. Both the smaller and larger degree cycles will be pointing downward after 2013, so expect hard deflationary forces on Copper from 2013 to 2017. Between now and 2013, though, copper is in a bit of a no mans land in terms of cycle analysis.
Fall/1977
Fall/1985
Fall/1993
Fall/2001
Fall/2009
(A)
a b
1 4
a b
(B)
(C)
5
(A)
Gap = $3.86-$3.91
2 a
The 16 year Cycle (from first slide) points downward until 2017. With the 8 year still pointing up until 2013, the cycles were in a no mans land. This Copper Story could well be over and wont be a long term buy again until 2017.
(B)
3
b
(C)
5
d
(A)
b
a c
(C)
5 1
2 a
(B)
Left Shoulder
Right Shoulder
H&S within the larger H&S setup
Copper Weekly
Remember how weve been highlighting the insipient Head and Shoulder pattern on the S&P 500 (previous slide)? Copper, as a barometer of economic health, is sporting a similar look. Interestingly, the neckline support of the S&P 500 comes it at the 50% retracement of the entire advance, the same level as with Copper.
Head
Left Shoulder
Right Shoulder
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Wave Symbology "I" or "A" I or A <I>or <A> -I- or -A(I) or (A) "1 or "a" 1 or a -1- or -a(1) or (a) [1] or [a] [.1] or [.a] = Grand Supercycle = Supercycle = Cycle = Primary = Intermediate = Minor = Minute = Minuette = Sub-minuette = Micro = Sub-Micro
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