Our main scenario is bearish, but there’s an alternate too
Quick update on copper. Copper has softened against resist and either set a (b) wave high or ‘a of a more complex (b)’. Looking at a daily chart there is some wiggle room for a modest new high in the short term if they react strongly to support at 2.88. I have also included a chart of the copper mining ETF COPX so as to have a visual of the possible complex (b) wave alternate.
In the short term copper has advanced as I laid out in the last daily chart though reaching initial short term targets now so I thought I would give an update. Big picture, this is either working on a (b) wave or the first step up in a (b) wave depending on where you place the (a) wave low.
We expect a reversal
Since the middle of last year, my view has been that copper needs to bounce in a (b) wave as preparation for rolling down again in a (c) wave. Copper is now at an initial target for ‘c of (b)’ at 2.85. When dropping down to a daily chart, you can make a case for a little push up for one more wave up so as to get a five count up from the early January low. Once copper does roll lower, if it makes a higher low to the 2016 low, it will qualify as both a wave [b] or [ii]. If it eventually makes a new low to the 2016 low, it will be valid as a [b] wave low.
Bears need to wait for it to reset first
Starting with the copper monthly chart for perspective. Primary thesis is that a large corrective formation completed at the 2016 low and that the climb up to the late 2017 high was the first impulse up from that low. That implies a corrective move lower and my assertion is that copper completed the first move of that correction in the summer of this year and due for a consolidative bounce before dropping in the last leg of the larger correction. I have penciled in the next corrective low to coincide with a cycle low middle of next year at a higher low to that of the 2016 low though a new price extreme in [b] would not break the pattern.
Here are some potential entry areas
But manage your short positions now