UPDATE: Dr. Copper was not feeling bullish and broke below its descending triangle below the market foreshadowing this latest decline. Copper did bounce off its breakout level at 3.55 watching for a bounce here and how the market reacts to it. You could see the market do the same as it is near its summer breakout level.
Copper is a metal that has been said to lead the market, since it is so widely used in the manufacturing construction etc. Because of this copper is closely followed and is called Dr. Copper so when the price of Copper begins to fall or rise it is consider to be signaling a rise or fall of the economy as demand either increases or decreases.
Looking at the latest copper chart there appears to be a disconnect with the market and Dr. Copper. The market has bounced the last two days while copper has failed too, instead it has settled at support. Copper not following through shows that not all the right market forces are behind the latest move upwards, which could mean a fake rally.
Now Copper is in even greater danger based on the descending triangle patter that has formed which if broken would signal more downside. A break below 3.69 would be a break of support and has the potential to move Copper 3% lower. This break could put pressure on the market as a strong sell off in copper would not be ignored. If Copper is able to get above 3.76 it would be a bullish and break the current downtrend so this is another important level to watch.
Keep an eye on this pattern and this metal! If the market rallies and copper begins to join it then there is confirmation but copper breaks below support and the market just might have to follow.
