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The bearish copper forecast

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Copper futures recently tested the resistance area we had identified in a post at our website in February. In fact that area produced several opportunities for bearish traders to get in on the anticipated strong decline.

Now that bears have made their initial move, we show some areas to watch for possible downward continuation.

Our main Elliott wave scenario treats the recent drop as the start of what should be wave (c) of a three-wave (a)-(b)-(c) move. Readers at See It Market might remember that we predicted a similar path for the Global X Copper Miners ETF (NYSEARCA: COPX) when wewrote about it in November .

As our readers know, any move that occupies a 'c' position in a corrective pattern is likely to be a strong one. In this case we believe the correction began in December 2017 and has already moved through waves (a) and (b).

The Gann square-of-nine measuring technique often works well to find support and resistance levels with copper futures and precious metals. Right now a Gann level at 2.69 waits as possible support for a small bounce.

The highest reward/risk opportunity might be to watch for one of the Gann resistance levels to hold near 2.79 or 2.90. That could lead to another strong decline as the "middle third" sub-wave of (c).

Note that the Lomb periodogram at the base of the chart is starting to reach the area that could coincide with a bounce or consolidation. The Lomb is a relatively fast-response way to estimate the timing of price cycles.

You can find a description of the alternate Elliott wave scenario at our website.

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Trading On The Mark keeps its subscribers on the right side of the market on timeframes ranging from intraday to swing trading. Beyond the public blog, subscribers have access to frequently updated charts and posts covering equities indices, currencies, bonds, metals, and other commodities. Members also can participate in TOTM’s live intraday trading forum, which provides real-time guidance on market conditions and entry and exit opportunities in the e-mini contracts for equities indices and currencies. 

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