- New Science in old markets -

Copper drops into extensions, Sugar update

Copper prices have fallen over 16% since early June and in doing so have pushed down through several weekly-scale compressions. This argues that the decline will probably continue for some weeks longer but there have been daily-scale bottom extensions in the past few days and this argues that the present 'leg' down is probably over and that prices will now pause or bounce:

Copper weekly cmp, dly exts

If you want to buy some copper, this is your chance, but we think there will be only a small window to make money on the long side here before the downtrend re-asserts. Resistance starts about 10 cents above current prices, so there is room for a profit.

Sugar has also been weak but the situation is the exact reverse. There, weekly-scale bottom extensions stemmed a long running bear market and the price has been ranging since then. We have written several times that we think many crop commodities are 'bouncing along the bottom' prior to the next general up-move and we are inclined to buy many of them - mainly grains and sugar - for those bounces when we get the right signal.  That is not yet the case in sugar as it is falling from a pair of daily-scale compressions that we expect will lead to a bit more weakness before we can buy. We wait, but probably not for long:

Sugar wkly ext, dly comps

All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com