Copper futures outlook

Copper is making a 3-week high as base metals are rallying. Firmer global equity market and supportive economic data are cited for this move. Some are speaking of a looming deficit in copper supplies, expected to push prices to record highs. Do we have anything different to say? Yes. Not because we wish to be different, but because a five wave move is nearing completion. Take a look at the attached chart of Copper (The conituation contract). Elliott wave analysis of copper suggests that once we reach above 415 levels, there is a growing danger for prices to top out. The outer target is currently placed at 448. What could trigger a reversal up there? Honestly I haven’t the faintest idea. But I would urge traders and hedgers to be aware of the phenomenon witnessed in millions of chart patterns that when a five wave move finishes, we will get a correction of the entire move, usually back to the area of the prior 4th wave of one lesser degree. In the case of copper, this means a potential move of 25% down once we top out. The key question is when will we know that copper has actually topped out? It is hard to say at this point, but if one were to watch the intraday data, pehhaps he will be able to spot a mini 5th of the 5th of the 5th! But for most people the best way to deal with this is to wait for a sharp downmove, and sell on a recovery with stops above the high seen. That often works! Good luck.

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  1. Thank you Ramki for the analysis, impressive and a lot to learn from you. I have one request please, its been a long time, you haven’t update us on GOLD, would appreciate in your free time to give us your view.

    Thanks in advance

  2. Nice count Mr. Ramki. I can also spot a wave 5 of 5 on AUDUSD. As pointed by you we can expect a very healthy correction in risk assets in 1Q 2011

  3. respected sir, thank you very much for your nice analysis.sir please if you can update about gold, silver ,crude and other base metals

  4. I have one request please, its been a long time, you haven’t update us on crude oil , would appreciate in your free time to give us your view.

  5. Dear Sir:
    Copper as of today April 9, 2011 is at 440, can you please look at its chart again and give your analysis. Secondly, would be grateful if you could analyze Silver too.

  6. Dear Sir:

    I am based in New Delhi, India and would like to know if you can suggest a charting software too.
    Thanks Once again.

    1. Manish, I would leave other readers of this blog to come up with an answer as I have been out of India for over 20 years and dont know what is available there.

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