Copper Drops Like A Rock

Many traders and investors consider copper to be a leading indicator for the stock market. The legendary trader, Jesse Livermore, used to say that a strong copper market was a sign of a strong stock market. When copper declined sharply it was a sign a weak stock market ahead. Today, many of the leading copper stocks are trading sharply lower.

Southern Copper Corp. (NYSE:SCCO) is leading copper producer that is trading lower by 0.95 cents to $39.80 a share. This stock topped out on January 3, 2011 at $50.35 a share. This stock has now declined lower by 20.0 percent from it’s January high. The stock remains weak on the daily chart and may test the $38.00 level which is the next important daily chart support area. Day traders can look for intra-day support around the $39.50 area.

Freeport McMoRan Copper & Gold Inc. (NYSE:FCX) is the worlds largest copper producer. This stock is often viewed as a copper EFT because of it’s popularity by traders and investors. FCX stock will have some intra-day support around the $48.00 level, however, the stock remains weak on all time frames and could trade lower in the coming days.

The iPath DJ-UBS Copper TR Sub-Index ETN (NYSE:JJC) is trading lower by $1.80 to $55.79 a share. The JJC tracks the action in copper. JJC had very good daily chart support around the $56.00 level on the daily chart, however, that level has been breached today. The JJC is now in a bearish technical position on the daily chart. Intra-day trader can watch for support around the $55.00 level. This is an intra-day level where the JJC can see a bounce. As for the daily chart the $54.00 level is the next decent support area for JJC.

About Nicholas Santiago 576 Articles


Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets.

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