In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
False Start of Failed Breakout?
The markets have been a bifurcated mess for more than a year now. During this time the relative strength from commodities and commodity-related stocks has stood out. Both have been on a tear and continue to rip higher. But despite the broad strength in commodities, Copper has gone nowhere since many risk assets peaked in May of last year.
That changed last week when Copper printed fresh all-time highs. Those new highs were short-lived though, as price quickly slipped back within its prior range. So was last week’s move in Copper a false start or a failed breakout? As any good technician, we want to err in the direction of the underlying trend, which is higher. But, we need to see prices agree before we have any conviction. For now, we want to remain patient and look to the key risk ratios and the bond market for clues to Copper’s next directional move. The direction in which this crucial economic barometer resolves will provide critical information into the structural outlook of the current rally in commodities and risk assets in general.
