dr Copper is often cited as a leading indicator for the global economy, capable of predicting future economic trends. Because copper is used extensively in industries such as construction, electronics, and transportation, its price history is often viewed as a reflection of the state and direction of the economy. In this article, we analyze the copper price chart to gain insight into the health and growth of the global economy and how it relates to expert doomsday predictions.
Before diving deep into the answer to this question, we recommend that you reread the article we wrote on the exact same day the January bull run began (January 12): Are Economists Lying Or Confused Or both? Additionally, in early March, we published this article: Copper Says No Market Sell-Off In 2023. Are you Listening?
If we look at the daily time frame of the copper price chart, we can observe that there was a nice uptrend in 2021. However, the uptrend broke in April 2022 and copper has been working on a reversal ever since. It is not yet clear if this is a bullish reversal or a bearish reversal, but for now it is showing bullish reversal characteristics.
A crucial aspect to note about this reversal is the importance of readings above the 50% retracement level. Such readings tend to generate a bullish bias and copper has been trading above the 50% retracement level since January 12, 2023. In fact, at the time of writing, it is flirting with the 38.2% retracement level (fine orange line).
This bullish outlook is in stark contrast to pundits’ doomsday predictions. Numerous articles mention pundits, analysts and other gurus predicting a major drop in markets and a major recession. For example, a Forbes article entitled “Why We’re Headed For A Recession And What You Can Do About It” warns that a recession is imminent and investors need to be prepared for it. Another article in The Guardian entitled “Global Recession Fears Mount As Coronavirus Spreads” highlights the growing fears of a global recession as the coronavirus spreads.
However, it is important to note that the copper chart is not the sole indicator of the global economy, and these predictions are often based on a variety of other factors such as political events, inflation, and monetary policy. It is always important to consider multiple sources of information and analyze them in the context of the macroeconomic landscape.
In summary, while expert doomsday predictions are legitimate concerns, the copper chart’s message is in sharp contrast. The current trend and readings above the 50% retracement level are suggesting a bullish bias, indicating a potentially healthy and growing global economy.
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