Copper Begins To Stir Offering Clues To Overall Commodities
Yes, Copper has been a disastrous commodity, largely because it is closely linked to the health of the Chinese economy.Let’s notice on the enclosed daily chart that Copper has been in a period of relative stability between 2.00 and 2.25 for the past 10 months, which represents either a sideways, bearish continuation pattern within the confines of the dominant intermediate-term bear trend—ahead of another downleg, or a multi-month base formation that will challenge key resistance at 2.27-2.32 and break out to the upside into a powerful recovery rally.It is interesting that 10-Year Yield has climbed above its 2016 resistance line at 1.62%, perhaps reflecting growing perceptions that the U.S. economy and the Chinese economy are in better condition than most people realize, which also is reflected in the lift in Copper prices.
Crude Oil Inventories Decline, Gasoline Surprises To The Upside
October Crude Oil broke through and closed below trendline support on Wednesday, September 14, 2016, trading down to 43.42 and settling at 43.58.I think the market is still reacting to the International Energy Association’s monthly report showing crude oil’s supply glut should continue into the middle of 2017. They have repeatedly stated supplies will come into balance before the end of 2016. This doesn’t appear to be the case, and since they usually overstate demand prospects, the idea they are saying demand growth is slowing could signal it is declining more than has been forecast.
The EIA report came out on Wednesday and showed crude oil inventories declining by 559,000 barrels, lower than the increase of 1.44 million barrels expected. Cushing Oklahoma inventories fell by 1.245 million barrels, more than the 300,000 decline expected. Gasoline inventories surprised to the upside, increasing by 567,000 barrels, as traders were looking for a decline of 1.1 million barrels.
Distillates rose by 4.6 million barrels, confirming the API reports 5.3 million barrel build. The close below the trendline could pressure Crude Oil and lead to a test of the September 1st low at 43.00, then trendline support at 42.45. Resistance is at the 50 DMA (44.72) and then the 8 DMA at 45.30. A rally above here could lead to a test of the 21 DMA (46.18).
Daily Pivot Points for 9/15/16
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