My latest obsession being Copper. I found this weekly chart interesting. Some observations:
- Strong downward momentum followed by consolidation wedges seem indicative of bottoming.
- Momentum breakouts from these wedges seem to begin a new strong trend.
- Most recent downside momentum came with a higher price low.
- Most recent upward momentum was strongest since June of 2010 (goes along with a triangle breakout).
- Once a trend is established the trendlines have been very clean, while a breakdown from the trendline sees an equally clean throwback to the trendline before a steeper correction ensues.
- The momentum breakout of the wedges is proportionate to the pullback which follows. So, for instance, the first one back in 2009 saw 5-weeks up upward momentum followed by 5-weeks of consolidation pullback. The second breakout in 2010 saw 3-weeks of a momentum breakout followed by 3-weeks of consolidation.
At this point we could suspect that a pullback from here has buyers interested. Should price fail from this breakout and return to the 3.45 area we could presume that longs might be trapped, causing a dramatic failed breakout selloff. But at this point things are looking good for Dr. Copper.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.