Commodities | Dec 09 2010
FNArena has added another video to its Investors Education section on the website. This time ATW's Jerry Simmons explains why investors should closely watch what's happening in the copper market, widely regarded as a leading indicator for risk assets together with Chinese equities and AUD/USD. Simmons offers a few scenarios from a technical point of view.
Summary and Comment on ATW Strategic Prep Video 2010-12-06 “HG Comprehensive Analysis”; .wav format; 49 min total duration; 56.5 MB
Summary
In this video, Jerry Simmons, Lead Mentor and Co-Founder of the Advanced Trading Workshop, Inc. (“ATW”), New York, emphasises the need for daily monitoring of global economic news releases, not just US news releases, points out one of the best sources for such data and moves on to analyse the current structure of the copper price (“HG” for “high-grade”) and scenarios to the upside and to the downside of the current market price.
– Copper, together with the FXI (ETF for 25 leading Chinese stocks) and the AUDUSD pair, is a leading indicator for the S&P and international equity markets(1).
– Copper formed a long series of major highs, from 2006 – 2008, between the $4.00 to $4.10 level, which is now Key Resistance.
– For the upside scenario (a sustained breakout of the price to the upside) to be favoured, we would need either a daily price bar (“BOB” = Break-out Bar”) whose low is above $4.10, or two consecutive closes above $4.10.(2) If this occurs, the first upside target would be the $4.28 – $4.32 price level4; the second upside target would be the $4.50 – $4.53 price level.
– For the downside scenario (a sustained breakout of the price to the downside) to gain the upper hand, the DPTL (Dual Purpose Trend Lines) at 3.87 – 3.97 would have to be taken out to the downside, i.e. the price would have to drop significantly below $3.87.(3)
Comments
1 Examples: (1) Copper bottomed in late December 08; about 3 months before the low in the S&P500 which was in early March 09; (2) Another, lesser important low in the copper price occurred on 11 June 2008, a month later, in early July 2008, the S&P500 bottomed.
2 Jerry Simmons holds that it will be difficult for the S&P500 and other major equities markets around the world to break out to the upside without copper first achieving such a break-out to the upside.
3 Should this occur, it would do significant damage to the upside scenario not only of the copper price, but of global equity markets as well.
4 Should the copper price break-out to the upside to its first target of $4.28 – $4.32, we can expect the S&P500 to rally to its first upside target of 1245-1255 soon thereafter, given the proven correlation between the copper price and the S&P500 and the leading indicator nature of the copper price over the S&P500 equities index.
To view the ATW Strategic Prep Video (originally from November 29, 2010) titled "HG Comprehensive Analysis" click HERE or visit the FNArena Investors Education section of the website.
Here's the direct link: http://www.fnarena.com/index2.cfm?type=dsp_minc_video&p=17
All views expressed are Jerry Simmons's, not FNArena's (see our disclaimer).
Jerry Simmons has over 25 years of full-time trading experience. He is the senior partner and head mentor for the “Masters” Programme within the education system at New York based Advanced Trading Workshop (ATW). ATW recently set up shop in Australia through the establishment of ATW Australia (since mid-2010).
FNArena is pleased to have Jerry Simmons as a highly valued contributor to its service which aims at both educating investors and assisting them with their own market analyses.
The above mentioned videos can be accessed via the FNArena Investor Education section at http://www.fnarena.com/index2.cfm?type=dsp_minc_education)
About ATW Australia
Founded in June 2010, ATW Australia is a “one-stop-shop for all a trader needs to succeed”: quality education for new traders, superb advanced trading education, fast unfiltered data, a world-leading trading platform, customer oriented competitive brokerage, quality ‘Made in the USA’ specialized trading computers, trading magazines, and the all-important psychological mentoring and coaching for traders. The trading educational products are provided by the Advanced Trading Workshop, Inc. in New York, all other services are provided by a network of partners that were chosen based on their superior products and services in their specific field of expertise. FNArena is one such partner.
To learn more visit www.advancedtradingworkshop.com.au.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
