Monday , 24 April 2017


Alert! Copper Has Plummeted – Plunge In S&P 500 Could Be Next – Here’s Why

Copper has just met the lower resistance line of its descending triangle pattern and should it break throughCopper-USFS that resistance the price for copper could fall like a stone. That, in turn, would have a MAJOR “watch out below” impact on the future level of the S&P 500. Let me explain.

By Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money) and the FREE bi-weekly Market Intelligence Report newsletter (see sample here; sign up here).

Historically, copper has been a barometer of economic growth exhibiting a high positive correlation with the performance of the S&P 500. 6 months ago (the end of August, 2013) the two categories began diverging from each other – not just a little bit – but dramatically – and continue to do so (the S&P 500 is UP 13%; copper is DOWN 11%). That suggests that there is less demand and that growth is slowing down.

When copper performs well it indicates increases in cyclical growth or, at the very least, expectations for growth. The 36% decline in the price of copper since July 2011 suggests there is an ongoing demand for less copper and that, as such, growth has been, and continues, to slow down. This, in and of itself, strongly suggests coming lower levels in the value of the S&P 500.

The decline in the price of copper has taken the form of a descending triangle and as of yesterday it was at a crucial point within said triangle, right at the lower line of resistance. Triangles predict that once support is taken out (in the current instance once the price drops below resistance at $2.95) the extent of the future decline is determined by the extent of the initial decline which was 33% (between July 2011 & October 2011). That would suggest a further decline of 33% in the price of copper! That’s bad enough – terrible actually – but the implications for the future level of the S&P are alarming to say the least.

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Perhaps, after all, there is something valid in all the negative prognostications for the future of the S&P 500 that we have been reading about lately. (See the following links for details.)

  1. Warning! Really! There IS Danger Ahead for the Markets! Here’s Why
  2. We’re on the Precipice of a 50% Drop in the U. S. Stock Market! Here’s Why
  3. Stock Market Will Collapse In May Followed By Major Spike in Gold & Silver Prices! Here’s Why
  4. Dr. Nu Yu: “Stock Market Alert! S&P 500 Could Correct to 1640! Here’s Why”
  5. 4 Clues That a Stock Market Collapse Is Coming
  6. End of “Wall Street Party” Will Be a Catastrophe! Here’s Why
  7. Stock Market Bubble Going to Burst & Unleash Destructive Forces on Global Economy
  8. These Indicators Suggest Stock Market Returns Are “Too Good To Be True”
  9. Bookmark This Article: The Stock Market Will Crash Within 6 Months!
  10. These 2 Stock Market Metrics Make Me Feel Uneasy – What About You?
  11. 4 Clues That a Stock Market Collapse Is Coming

Furthermore, it might just substantiate that all the rose-coloured forecasts for the markets (see the following links for details) are nothing more than hype and cheerleading by those in the business of keeping us in the game and separating us from our recent gains.

  1. This Chart of the Dow Suggests “Bring on 2014 – We Ain’t Seen Nothin’ Yet!”
  2. Relax! Take Stock Market Bubble Warnings With a Grain of Salt – Here’s Why
  3. Stock Market Bubble & Coming Recession? These Charts Say Otherwise
  4. The Stock Market: There’s NOTHING to Be Bearish About – Take a Look
  5. Pop a Pill & Relax ! There’s NO Immediate Danger Threatening Stocks
  6. Latest Action Suggests Stock Market Beginning a New Long-term Bull Market – Here’s Why
  7. Sorry Bears – The Facts Show That the U.S. Recovery Is Legit – Here’s Why
  8. Correlation of Margin Debt to GDP Suggests Stock Market Has More Room to Run
  9. Stocks Should Have a Record-Breaking Year According to These 7 Bullish Fundamentals
  10. Don’t Be Scared “Stockless”! There’s No Fear Anymore – Anywhere!

So far (check out the price in the table in the right hand column) support is still in place – just barely. I will watch the situation closely and send out an “ALERT” or “ALL CLEAR” as things unfold.

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Related Articles:

1. Copper: The Nervous System of Our Society – Here’s Why

Copper is one of the most widely used metals on the planet, and has been for more than 10,000 years. Today, it’s the nervous system of our society – of our cities, homes, tools and toys. The simple truth is that the western lifestyle is completely dependent on copper. Here’s why as depicted in the infographic below.

2. Warning! Really! There IS Danger Ahead for the Markets! Here’s Why

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The Dow is up almost 28% but the chart below showing how it’s 12% annualized gain over the past 5-years compares with past bull markets suggest we are probably not at a top – that “We ain’t seen nothin’ yet!” Take a look. Read More »

6. Relax! Take Stock Market Bubble Warnings With a Grain of Salt – Here’s Why

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Bubble predictions are headline-grabbing claims that are sure to attract reader/viewership and more than a few worried individuals who will be pushed to act but, like all forecasts, these bubble warnings should be taken with a grain of salt. Read More »

7.  Stock Market Bubble & Coming Recession? These Charts Say Otherwise

The real value of the stock market is positively correlated, over time, with the amount of freight hauled by the nation’s trucks (in other words, the physical size of the economy has a lot to do with the real, inflation-adjusted value of the economy) and the latest numbers (see chart) strongly suggest that we are not in a stock market bubble. Read More »

8. The Stock Market: There’s NOTHING to Be Bearish About – Take a Look

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There’s nothing to be bearish about regarding the stock market these days. I’ve reviewed my 9 point “Bear  Market Checklist” of indicators and it is a perfect 0-for-9. Not even one indicator on the list is even close to flashing a warning sign so pop a pill  and relax. There’s no immediate danger threatening stocks. Read More »

9. Pop a Pill & Relax ! There’s NO Immediate Danger Threatening Stocks

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Right now there’s nothing to be bearish about. I say  that with conviction, because my “Bear  Market Checklist” is a perfect 0-for-9. Heck, not a single  indicator on the list is even close to flashing a  warning sign. We’ve got nothing but big whiffers! Take a look. Pop a pill  and relax. There’s no immediate danger threatening stocks. Read More »

10. Latest Action Suggests Stock Market Beginning a New Long-term Bull Market – Here’s Why

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There are several fundamental reasons to believe that this week’s stock market activity, where the S&P 500 has moved more than 4% above the 13-year trading range defined by the 2000 and 2007 highs, could mark the beginning of a long-term bull market and the end of the range-bound trading that has lasted for 13 years. Read More »

11. Sorry Bears – The Facts Show That the U.S. Recovery Is Legit – Here’s Why

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Today, I’m dishing on the unbelievable rebound in residential real estate, pesky  rumors about the dollar’s demise and a resurgent U.S. stock market. So let’s  get to it. Read More »

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Are stocks in a bubble? While leverage has returned to the stock market driving up stock prices and aggregate demand in the process, margin debt is still shy of its all-time high as a percentage of GDP, so there is certainly some headroom for further rises. A look at the following 5 charts illustrate that contention quite clearly. Read More »

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14. End of “Wall Street Party” Will Be a Catastrophe! Here’s Why

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18. Bookmark This Article: The Stock Market Will Crash Within 6 Months!

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Until recently, I have not used the term “stock market crash”. I do not take using this term lightly. It brings with it major repercussions. I am now breaking out this phrase because of the current state of the stock market. This stock market crash will occur within the next six months from today… The markets will fall within a combined day/few days a total of at least 20%. Bookmark this article. Read More »

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One comment

  1. Because Copper is used in industry, I see its decline as an indication that Countries like China have slowed their growth which in turn will have a huge effect on both their economy and the rest of the World’s economy!

    I really like to learn more about what readers think is the best way to “hold” Copper since doing so would require much more physical space than holding Silver which takes more space than Gold which takes more space than Diamonds.

    I’ve also noticed that some “preppers” on Twitter are selling 100% Cooper rounds in ounces, so those that are thinking about bartering should give owning Cooper some serious consideration!