Clinging To Support

Thus far the bulls’ Maginot Line at SPX 1180 has remained intact and there are some tentative signs of dip buying stepping in – either that or it’s today’s dual POMO auctions. Have you ever noticed that the shriller the fever pitch of the bearish blogosphere the more sluggish any moves to the downside? Something for you to ponder on – maybe while you’re busy attacking that turkey leg over Thanksgiving 😉

Before you start criticizing – Fibonacci retracements have been well documented and used by traditional analysts. So if you’re wave wanking please don’t get your panties in a bunch and don’t send me emails with your exotic wave counts. Anyway, as you can see there’s a small volume hole below the 50% fib mark and I maintain that the longs are well served to not have it breached. A drop below probably drives us much lower.

But what’s more interesting to me personally right now is – copper. Please step into my evil lair so I can slap you with some juicy charts:
[amprotect=nonmember] More charts and cynical commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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Here’s the hourly and the daily panel. In terms of Net-Lines there’s not much to see here but in case you missed it – we are painting an inside candle today. If you’re not sure how to play that then look no further than our brand spanking new cheat sheet.

What’s however even more compelling is my medium and long term charts. The weekly shows us a NLSL looming below at 3.2305 – if breached I see us scraping 2.8 in no time. The monthly is even more interesting as it’s painting – you guessed it – another inside candle! How cool is this? On a long term basis this gives us an excellent setup – again follow the same trading rules as for the daily setup. Except that you’re now a LT trader and as such your time frame is measured in months, not weeks or days. Can you fade your emotions that long? 😉

However, even if you’re not a hard core commodities trader these two charts may still be of immense value to you. Let me show you why:

If you’re a noob you may not have seen this chart before – if you’ve been here for more than a few weeks than you are well familiar with it as I often post it as part of my weekend forecasts. Simply – wherever copper goes equities usually follow. I have marked several prior divergences on the chart above and you are well served looking at copper when planning your medium or long term trades on the equities side.

Right now it’s still pointing down – I don’t see a bullish divergence of any kind – and that ought to be a bit unsettling for the bulls among you. I think the daily setup will give us clues as to how the weekly setup will resolve and that of course will trickle into the monthly inside candle setup. Remember that Thursday is an NYSE holiday and most likely very few folks will be around on Friday. That only leave us with only four full trading days for this month (five if you count Friday). Not that much time left and this is looking to be a pretty short monthly candle.