Copper briefly spiked to the upper extreme of its increasingly mature Balance area and sold off sharply (and continuing as I write this at 10:21 PM, EST). This leaves a “selling tail” in Market Profile parlance which indicates rejection and signals a reversal.
Copper displayed uncharacteristic relative strength during Thursday’s stock market decline, evidently holding up in anticipation of a rosier Chinese economic report.
If stocks decline again tomorrow my guess is copper will sell off hard. Copper needs to first trade below about 34100 to signal that a sharp decline may be underway.
If copper trades above the selling tail high at 34450 it is short-term bullish and may be accompanied by a rally in the stock market.
Click on chart to enlarge.
