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Wrong Again! The “Fake News” Missed This Key Breakout

Copper prices at risk for a fall, screams the headline darting across my computer screen.

That sounds ominous. And the financial journalists have plenty of pesky facts to back up their thesis:

“Fears of sluggish Chinese economic growth and the end of supply disruptions loom over the copper market,” The Wall Street Journal reports, “threatening to take 10% or more off prices in the coming months…”

Copper’s up more than 7% this year, the article continues, based on Trump-related infrastructure stimulus. We can’t dispute the gains. But the assigned reason for the rise is dubious at best.

Is an actual infrastructure spending bill anywhere close to getting passed? Of course not. The political class in Washington is neck deep in an argument over a health care bill that’s already on life support. I haven’t heard a single peep about infrastructure spending in months.

Once again, the media’s market narratives are total bunk. I can’t keep track of all the reasons copper is supposed to go up or down this year…

Copper’s rising because Trump’s talking infrastructure!

Wait a second…

Update: Copper’s going to drop now because Chinese demand is weak!

Hang on a minute…

Copper deficit will deepen, but that information is already priced in!

It’s enough to make your head spin.

Luckily for us, we can ignore the media circus and simply follow the trends. When we shut out the noise, it’s easy to see that Dr. Copper is starting to sneak higher once again. After years of pain and suffering, a sustainable rally could actually be in the works.

It’s been a long time since we’ve taken a swipe at trading Dr. Copper. We made out like bandits betting on copper’s short-term pops in the past, particularly when no one else was paying attention to industrial metal. But the trading signals have been few and far between lately…

I can’t say that I blame anyone for ignoring copper over the past few years. Its boom days are a distant memory. Going back over my old charts, I found that the price of copper exploded more than 620% from 2001 to 2011. Crazy!

Huge moves like these are ancient history for copper. As the commodity super-cycle topped out in 2011, the metal entered a death spiral that lasted nearly six years.

Now, copper is finally showing signs of life once again…

The post-election rally back in November was the spark that helped copper snap it’s nasty downtrend. After seven months of choppy consolidation, copper is back near its March highs and ready to make a play at another huge breakout.

Commodities enjoyed a nice little bounce to start the trading week. Copper helped lead the way with a gain of nearly 1.25%. As the US Dollar Index continues to push to new 2017 lows, we could very well see continued strength in the metals. Don’t sleep on this rally!

The easiest way to play a copper comeback is Freeport-McMoRan Inc. (NYSE: FCX). I like to say that buying FCX is like buying a call option on copper without the high commission. When copper jumps, the miner tends to magnify the move.

FCX is coiled up nicely right now at $13. If copper can manage to snag a little momo here, we could see FCX scream back toward its February highs above $16. That could put fast gains of 20% or more in your pocket.

Let’s grab this tiger by the tail today for a short-term trade. It could be our ticket to explosive, double-digit gains this month…


Greg Guenthner
for The Daily Reckoning

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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