Dr Copper is a major warning

Copper saw its first daily close under the important $3 threshold since summer 2010, settling -9 cents @ $2.95. Commodity bears should now be seeking a monthly close <$3, and if that occurs, the door will be wide open to a severe drop to the 2.25/00 zone.


Copper, monthly

Summary

Suffice to say, the decline in copper is getting increasing attention, and I most certainly believe it is a major warning of trouble for the broader US/world capital markets. Yes, it is just one commodity, but as an economic indicator, it is second only to Oil.

Deflationary bears should continue to pay close attention to how Copper closes the month. As it is, further declines seem very likely, and any monthly close <$3 should clarify the trend for the next few months.

The weakness in copper should especially be seen as a severe warning to the Gold/Silver bugs. If Copper falls to the low $2s, then I'd be looking for Silver $15, and Gold $1000.


Looking ahead

Again, there really isn't anything major due tomorrow. Just the EIA Oil report and the US treasury budget, but Mr Market usually has little interest in those.

*next sig' QE-pomo is not until Thursday.
--

Goodnight from London