Weekend Daily: Has “Dr. Copper” Signaled a New Round of Inflation?

Global X Copper Miners (COPX) found support twice at the 200-week MA.

As we await the midterm elections next week, there was massive speculation about China loosening COVID-19 restrictions.

Additionally, with a lack of global copper inventories, metals and miners erupted on Friday. Global X Copper Miners (COPX) found significant support twice at the 200-week moving average. COPX sold off at critical support in early July, retested the summer lows in early October, and formed a double bottom. COPX also displayed strong momentum on the Real Motion Indicator over the last several weeks.

So, what does this mean for investors, copper prices, and, by extension, copper miners' share prices?  

The doctor is back—Doctor Copper, that is.

This metal has a Ph.D. in its forecasting ability and as a leading indicator of inflation and expansion.

COPX leading is also significant because copper miners tend to lead the price of copper first, adding weight to our belief that there is a sequence of events unfolding in the commodity Supercycle. According to conventional thinking, a thriving economy will see extensive development of homes, offices, factories, warehouses, and retail, fueling demand for copper, a vital construction component. However, it is possible that the electrification of everything, like EVs that need an enormous amount of copper, will supersede any slowdown in the aforementioned areas. Copper prices should continue to rebound as global inventories have plummeted.

If you're looking to add exposure to copper miners quickly, the Global X Copper Miners ETF (COPX) is a prudent choice.  

We can help you trade commodities and protect against wild price swings. Please reach out if you would like more information about trading commodities. To learn more about Mish's trading service you can sign up for a consultation with Rob Quinn, our Chief Strategy Consultant, here.

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Mish in the Media

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See Mish join Neil Cavuto and Eddie Ghabour on Cavuto Coast to Coast to talk about the Fed's recent rate hike decision.

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Mish discusses Meta and Palantir and how trends are switching in this appearance on BNN Bloomberg.

ETF Summary

S&P 500 (SPY): 370 support, 377 resistance; same as before. Russell 2000 (IWM): 174 support, 181 resistance; same as before. Dow (DIA): 322 support, 327 resistance. Nasdaq (QQQ): 261 support, 269 resistance; same as before. KRE (Regional Banks): 62 support, 65 resistance. SMH (Semiconductors): 188 support, 195 resistance. IYT (Transportation): 209 support, 213 resistance. IBB (Biotechnology): 127 support, 132 first resistance; same as before. XRT (Retail): 58 support, 63 resistance; same as before.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Wade Dawson

MarketGauge.com

Portfolio Manager