December copper futures on the Comex division of the New York Mercantile Exchange on Wednesday hit a fresh 14-month high of $3.1720 a pound. Price action this week has also seen a bullish upside technical “breakout” from a sideways trading range at higher price levels that had been in place for three weeks.
The red industrial metal is also in an 11-month-old uptrend from the December 2008 low of $1.3115. The copper bulls this week have gained fresh technical momentum and their next upside price objective is pushing and closing December futures prices above technical resistance at $3.2500 a pound. If nearby copper futures produce multiple closes below what is now solid technical support at the $3.0000 level, then bullish enthusiasm would be dented and that would be an early technical clue that a market top is in place.
Veteran market watchers know the copper market can be an early indicator of price action in other major commodity markets as well as the U.S. stock market. If the copper market starts to back down from its highs, that would also be an early bearish warning signal for the other raw commodity markets as well as the U.S. stock indexes. Stay tuned! Jim Wyckoff.