I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Tuesday, August 10, 2010

Doctor, It hurts when I do this

Doctor: Well then don't do that .... (yuk, yuk)

So the question is, what is "Doctor Copper"'s diagnosis for the economy? I would say pretty crappy.

"binv you are just a stupid permabear! Copper has obviously been rallying so you are obviously wrong!!"

Maybe. But the rallies recently look a lot more like a reaction than the start of a sustainable bull move. I think we have a bit more upside in copper (few more days / weeks), but then I think it will start correcting again. I think the large corrective structure since the beginning of 2010 is not done yet.

Also, as I have stated many times, here is my observation that both equities as a general asset class and the Dollar can fall together: US Dollar Count Updates, and why I think real assets will certainly outperform purely economically correlated assets and have nominal gains as well: Long Term View. I am also one of those whackos that think Gold is money and not a commodity and am bullish on Gold first and foremost quite independent of the inflation / deflation debate: binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market

My point in stating all this is that while I am bearish on Copper for the intermediate term (next several months), I am quite bullish on Copper for the long term (next several years). This is NOT because of an "economic recovery", but because Copper is a real asset and I expect most real assets to perform well. I view the next several months as a potentially very good long term entry point, much like December of 2008 was (and yes I did buy a couple of Copper Miners there, but mostly Gold and Silver Miners).

Just a few thoughts at any rate.

blog comments powered by Disqus