May copper futures prices have backed well down from the February contract and all-time high of $4.6575 a pound. Prices Tuesday hit a fresh two-week low of $4.2540 and are poised to push below strong technical support at the February low of $4.2435. Recent price action in the copper futures market has seen a nine-month-old uptrend on the daily bar chart negated, with prices now in a three-week-old downtrend on the daily chart. A close below strong technical support at the January low of $4.2185 in May copper futures would produce more serious near-term chart damage to then suggest a quick price move down to major psychological support at the $4.00 level.
For the copper market bulls to regain fresh upside near-term technical momentum to suggest a price up-trend can be re-established they would have to produce a close above strong technical resistance at last week’s high of $4.5540. Importantly, veteran market watchers know the copper futures market can be a leading indicator for trending price action in other markets, including the U.S. stock indexes. The fact the copper futures market has seen near-term chart damage inflicted is an early warning shot across the bow for the other metals markets, the crude oil market and the U.S. stock indexes. Stay tuned!–Jim Wyckoff