The copper market continues to sell off, but this could be setting up a longer-term trader-type setup.
Copper
The copper market looks pretty rough over the last couple of trading sessions, but I still see it as being in a massive grind higher, and the fundamental outlook, of course, remains pretty steady as well.
The underlying demand for copper and the electrification-of-everything type of environment we find ourselves in will continue to be something worth watching. Ultimately, the copper market falling the way it has, although rather drastically, is a little bit overdone, and I think part of it, at least, is a reaction to bond yields in America just going haywire.
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With the 10-year hitting 5% for the first time in years, that does tend to put a lot of pressure on pretty much everything. So, this breakdown for me does represent a buying opportunity eventually. The question, of course, is when does that play out?
The question now is going to be whether or not that's the right move.
Now, I am watching the stochastic oscillator, which is in the oversold position. It has not crossed over yet, but for me, that might be one of my entry signals. Falling interest rates combined with that would be a very interesting and intriguing way to play this market. We'll just have to see if that actually plays out as feasible.
To the downside, the 200-day EMA and the $6 level will both offer support as well, but I believe we've got a situation here where traders are perhaps panicking out of the market, mainly due to the bond market.
I suspect at this point in time, it's only a matter of time before we get a little bit of a bounce, and that bounce for me should be a signal that the longer-term trend could come back into favor.
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