Comments on the Copper market

These comments were emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:44 AM EST.

Last week, the DEC GOLD contract got a bit oversold and the market logged a string of advances in spite of the Dollar strength. But the market continues to struggle with overhead resistance as well as the Dollar's strength and, so far, has been unable to close above the $470 barrier. The daily chart suggest that the market is entering a fifth wave down which would eventually put the market somewhere south of the previous low at 456.10. Once this occurs, traders will have another tremendous buying opportunity as we head towards the New Year.

Silver continues to show resilience as it attempts to play "catch-up" with the Gold market. I'm not expecting anything spectacular from this market until Gold finally washes out and begins to rally but a retest of the $7.95 area is possible in the interim.

The trend in Copper remains positive as this market continues its march towards major psychological resistance at $2.00. Support lies just below the $1.86 level and, at least for now, the market doesn't look to be in any danger of testing that area of support. Should Copper break and close above $2.00, it would likely push prices to new highs and, in the process, bury those who are betting against this market.

Dale F. Doelling
Chief Market Techncian
Trends In Commodities


I just received this email from Myra asking for my comments.

Chinese copper trader vanishes after $800M short sale: Times By Ciara LinnaneNEW YORK (MarketWatch) -- A Chinese copper dealer has disappeared after selling an estimated $800 million of copper short, expecting the price to fall, the Times of London reported. Instead, the copper price has surged, setting a record $1.921 a pound on Monday. The Chinese State Reserve Bureau, where Liu Qibing worked, said the trader is on leave and that it had no knowledge of his dealing, the Times said. Concerns about the size of Liu's bet and his disappearance have raised concerns that the copper market is set for a trading scandal similar to the 1996 case in which a Japanese trader lost $2.6 billion for Sumitomo Corp.

My immediate response, with tongue planted firmly in cheek, is that this guy obviously has not been reading my comments on Copper. My only question is "How did this moron get put in a position to take such a position in the first place?" If anyone can give me a logical answer I'm all ears!

In case you're interested, it was the TREND FOLLOWERS who were BUYING while this guy was SELLING.