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This is, easily, the most interesting major chart in Global Macro right now.


  1. It’s the only one that’s not saying buy everything Chinese right here and now.
  2. It’s the only one that’s not saying that the Buck is going to Burn below the $74 line (US Dollar Index).
  3. It’s the only major macro chart that has been down for the last 3 weeks in a row (other than the US Dollar).

Last week, Dr. Copper lost another -2% of his value, closing out the week at $2.78/lb. There were plenty of reasons to support weakness in terms of what really matters to an asset’s price – supply/demand.

On Thursday, LME (London Metals Exchange) inventories for copper hit their highest levels since May. This morning, Jiangxi Copper, China’s largest copper smelter, made comments overseas about seeing a resurgence in scrap supply. On the margin, these data points certainly aren’t bullish for Dr. Copper’s price.

Altogether, for now at least, Chinese demand and the US Dollar are the two most dominant drivers of what happens on my screens every morning. Dr. Copper is telling me to pay attention to a scenario where Chinese demand slows (China’s stock market is -14.5% from its YTD high for a reason) and the US Dollar stops going down.

Tops and Bottoms, of course, are processes, not points. My immediate term TRADE point price for Copper is $2.85/lb (dotted red line in the chart below), while my intermediate term TREND point price is $2.54/lb.

Broken TRADE and Bullish TREND. Risk managers, take note.


Keith R. McCullough
Chief Executive Officer

Chart of The Week: Copper Cracks...  - a1