My favorite Head & Shoulders Patterns are the ones that aren’t that at all.
Markets trend. We know that for a fact. That’s why Technical Analysis works. Because as Technicians, we’re identifying primary trends.
And since we know that market returns do not fall under a normal distribution, and in fact, prices actually trend, it gives us a huge advantage over those who purposely choose to ignore price.
Funny how people like to ignore the only thing that actually pays anybody.
I always thought that was so strange.
Anyway, in today’s example of “Not a Head & Shoulders Top”, we take a look at Copper Prices. If you have any exposure whatsoever in the market, stocks, bonds or otherwise, then this is a resolution that will interest you and most certainly impact the value of your portfolio.
So is this a massive top in Dr. Copper? Or just a continuation pattern that will resolve higher, in the direction of the underlying trend?
I don’t know how this will resolve, just like you don’t know either. No one does.
But if we’re above that neckline near 4, we want to give the benefit of the doubt to the bulls. If prices are holding below that, then there’s likely a problem with this trend.
If US Interest Rates are going higher, and 10s are going to 2%, then you’re probably going to see Copper resolving higher.
If Crude Oil is going to 100, I think it’s going to be hard for Copper to be collapsing.
These are big developments.
So that’s how we’re approaching this market.
What about you?
Live Video Strategy Session
Last night was our Live Monthly Charts Strategy Session. As we head into the 4th Quarter we had a lot of very important things to discuss.
Is this move in rates for real? Is that why no one wants precious metals? Is that why Energy stocks and Financials continue to outperform? Where does the US Dollar fit into all of this? And which stocks are we buying and selling as a result?
We got into all of this and more last night. Premium Members can check out the video in full and download the deck with 150 charts here.
I hope you enjoy.
Ping me and let me know what you think!