Copper Cup & Handle Formation - Confirmed by Half-Yearly CloseIn a recent interview, Kevin Warsh, a former Member of Board of Governors Federal Reserve said: “External shocks like wars, pandemics, and supply chain disruptions may cause a spike in prices, that's not inflation. That's more like the weather. Inflation's more like the climate.
Weather refers to the day-to-day state of the atmosphere. A storm may come, but it will eventually pass.
Climate is the long-term average of weather patterns, typically measured over 30 years or more. If the underlying causes of climate change are not addressed, they are likely to affect future weather — for example, storms may become more unpredictable, occur more frequently, and intensify when they happen.
Going back to the financial markets. Have we address the underlying causes of inflation climate today? If not, then with every war or rumors of war or tariff or any unwelcome surprises.
They are likely to become even more volatile than before, some more bullish and the others more bearish.
What is the real cause of inflation climate the world is facing? Debt. At every pit stop, I will keep checking if there’s any chance that U.S. debt might start trending downward. If it does, my existing strategies would have to change. But for now, I’m maintaining these strategies. Here are some examples:
With fears of inflation still in sight, stocks have become more volatile. Since inflation hit a high of 9% in 2022, we’ve seen stock market swings widen.
With fears of inflation, bonds are under pressure. The drop in U.S. bonds wasn't triggered by the “Liberation Day” tariff announced on 2nd April alone. In fact, bonds peaked in 2020 and broke below their main uptrend support when inflation hit 9%.
With fears of inflation are also driving commodities higher — from “weather” to “weather,” so to speak. I’ve been covering gold, bitcoin, silver, and soybean oil. Today, copper looks interesting to me. Let’s dive into the technical. I find the half-year chart particularly interesting.
On this half yearly chart. We can see as the close on 30th June, copper settled firmly, closed above its $4.44 resistance that has been tested for years. This study indicates that copper could be at the beginning of an uptrend. I will be looking out for buying-on-dips opportunities whenever they arise.
What Began Well, Grew Risky — Yet Opportunity Awaits. Besides debt, there are two other key elements that may trigger fears of inflation from time to time. What do you think they are?
I would like to hear your thoughts on this.
Video version:
Mirco Copper Futures
Ticker: MHG
Minimum fluctuation:
0.0005 per pound = $1.25
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