Copper index decoupled from the China index

A look at the short term Copper chart (via the ETF – JJC), with a 10d and 20d MA

  • It broke below the support of 59.5
  • It is below the 20 MA
  • Volume spiked up

As I see Copper as a leading indicator of the market, this is one to watch. On top of that, I was looking at the relationship of Copper, Coal (KOL), China (FXI) and the S&P500 (SPY)

Until november, Copper and Coal were leading China and hence the US. Since then Coal, Copper and the S&P500 continued there uptrend, and China went down.

Money is flowing from the Emerging Markets to the US again, but is it then normal that Copper and Coal continu to rise ? China is the big consumer of Coal and Copper, so do we see China to go up, or Coal and Copper to go down. Looking at the chart of Copper, it might be that one to go for a correction.

 

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