Originally posted by Jagster Trading
Not just another false breakdown. OZL has been consolidating within a
Bear trend since mid-year however the market has just about made-up its mind on its future direction. Weekly momentum has returned to
INCREASINGLY BEARISH conditions recently, with a prob break below this-years low at 8.08 over the next few weeks imo. Once the break occurs, should continue to move to the downside over the next several weeks to months on waves of Bearish sellers that are prob further up the pike.. GLTA.
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Hi Jagster,
I suspect your TA is excellent and your reading of it is spot on.
However, I believe TA is a useful addition to an investing tool bag and just a single indicator that needs to be read in conjunction with a raft of other factors and not in isolation.
In Jan 2018 the US placed a 30% tariff on Chinese solar panels.
In April 2018 China put tariffs on 128 US products.
In May 2018 US put a 25% tariff on US$50 billion of Chinese goods.
Consequently Dr. Copper was flying until June 2018 and then dropped off a cliff. It seems to me simply as a result of demand concerns associated with the artificially created 'trade war' crisis that scared people.
IF (which is I agree is meaningless) sufficient US citizens hadn't simply assumed that 'The Donald' couldn't win and would have exercised a little effort like all his motivated rusted on supporters did, then he never would have won the election and I suspect copper would be way over US$3/lb and the OZL SP would be soaring.
Similarly IF sufficient Brit's that 'knew' BREXIT would never win had have taken the time to go to the polls and actually vote the world would be in a very different position. Lethargy has something to answer for.
The production of electric vehicles continues apace and some car makers (VW) have said they will stop making internal combustion engines as early as 2026. The need for copper hasn't evaporated. The supply crunch is coming and the heads of resource companies are outlining this fact. In 2019 I suspect the shortage of copper will become more apparent.
If you look at the 3 month copper chart my (projected) reading of it shows me that copper is repeatedly trying to break the $US 2.85 ceiling it's been under for 6 months and being repeatedly clawed back. I think it's only a matter of time until it does break through this ceiling into the clear air above.
When I combine all these factors with your chart I'm not so sure OZL is in for the start of a sustained bearish period.
Time will tell.
