Weekend Daily: Has “Dr. Copper” Signaled a New Round of Inflation?

Global X Copper Miners (COPX) found support twice at the 200-week MA.

As we await the midterm elections next week, there was massive speculation about China loosening COVID-19 restrictions.

Additionally, with a lack of global copper inventories, metals and miners erupted on Friday. Global X Copper Miners (COPX) found significant support twice at the 200-week moving average. COPX sold off at critical support in early July, retested the summer lows in early October, and formed a double bottom. COPX also displayed strong momentum on the Real Motion Indicator over the last several weeks.

So, what does this mean for investors, copper prices, and, by extension, copper miners’ share prices?  

The doctor is back—Doctor Copper, that is.

This metal has a Ph.D. in its forecasting ability and as a leading indicator of inflation and expansion.

COPX leading is also significant because copper miners tend to lead the price of copper first, adding weight to our belief that there is a sequence of events unfolding in the commodity Supercycle. According to conventional thinking, a thriving economy will see extensive development of homes, offices, factories, warehouses, and retail, fueling demand for copper, a vital construction component. However, it is possible that the electrification of everything, like EVs that need an enormous amount of copper, will supersede any slowdown in the aforementioned areas. Copper prices should continue to rebound as global inventories have plummeted.

If you’re looking to add exposure to copper miners quickly, the Global X Copper Miners ETF (COPX) is a prudent choice.  

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Mish in the Media

See Mish talk with Charles Payne on Making Moneyabout the Oil markets testing the limits of Fed policy, China, and what to buy in the metals.

Mish joins Cheddar to talk about some of the fallout from the most recent Fed Meeting.

See Mish join Neil Cavuto and Eddie Ghabour on Cavuto Coast to Coast to talk about the Fed’s recent rate hike decision.

Click here to see Mish and Helene Meisler’s panel at the Trader’s Summit event!

Mish discusses Meta and Palantir and how trends are switching in this appearance on BNN Bloomberg.

ETF Summary

S&P 500 (SPY): 370 support, 377 resistance; same as before.Russell 2000 (IWM): 174 support, 181 resistance; same as before.Dow (DIA): 322 support, 327 resistance.Nasdaq (QQQ): 261 support, 269 resistance; same as before.KRE (Regional Banks): 62 support, 65 resistance.SMH (Semiconductors): 188 support, 195 resistance.IYT (Transportation): 209 support, 213 resistance.IBB (Biotechnology): 127 support, 132 first resistance; same as before.XRT (Retail): 58 support, 63 resistance; same as before.

Mish Schneider

Director of Trading Research and Education

Wade Dawson

Portfolio Manager