May 012012

So you are looking for a medium term outlook for copper! After my last Elliott Wave comments that was posted on 26 September, 2011, we didn’t revist the copper charts. I am sorry for the long delay, but I hope today’s comments make you happy!

Elliott Wave Analyssis of Copper
A five wave move was completed on Feb 20, 2011 at 462.55. Have we corrected that adequately? Probably not. I think the dip to $300 marked the first step down, and we will likely get abother go at that later on. Keep an eye on what happens around 415. Once we move to that level (or beyond), any subsequent dip below $371 would confirm this view. But it should be possible to figure out the end point of the ‘c’ wave and get short near that top. “C” waves are always made up of 5 smaller waves, and the methods of anticipating the end of the 5th wave has been explained in my book in detail.

Sep 262011

Elliott Wave Analysis of Copper“The finest workers in stone are not copper or steel tools, but the gentle touches of air and water working at their leisure with a liberal allowance of time.” – Henry David Thoreau

I can amend the above quote a little and say “The finest workers in Elliott Wave analysis of Copper is not Goldman Sachs or any other name you choose, but the completion of an extended fifth wave, working with a liberal allowance of time” -Ramki Ramakrishnan

After you have read the link in the quote above, let us take a look at what I wrote back in December 2010. It was a bit ahead of time, because the end came only in February, and reached 462 (some $14 more than the preferred top). But what matters is IT WORKED! Today, we reached the 2nd wave of the extended fifth (at $318) a move of over 30% even from the 448 level. Give it enough time, and we could see Copper reach the prior fourth wave level of one lower degree, and that comes at 272 levels.

PS. SOme of you with sharp eyes would have noticed that I have changed the level where wave 2 was placed back in December 2010. But that does not affect the computation of the target for the extended fifth wave. Of course, you already know that because you have read my book “Five Waves to Financial Freedom” where detailed explanations are given!

May 252011

You have all heard the news.

Commodities rebounded from the biggest drop in almost two weeks after Goldman Sachs Group Inc. advised investors to return to raw materials….When Goldman Sachs analysts made their call yesterday, many commodities traders must have felt either relieved or angry. Relieved if they were long already, and angered if they were short. That is the long and short of it!

Why should anyone who was bearish feel angry? Perhaps it is because of what “naked capitalism” discusses in the post “Goldman Recants its $200 a barrel, ‘Super Spike’ call for oil”? But you would surely want to read ‘The Reformed Broker’ who noticed that Goldman made quite a contradictory call the same day!

While you are mulling about all this, perhaps a bit of advice from Peter Brandt would help. Peter has written a book titled “Diary of a Professional Commodity Trader”, and David Blair a.k.a The Crosshairs Trader has provided us with a quick excerpt…actually six major points. Enjoy!

Dec 102010

On 2nd December I pointed out that we are in the 5th of the Fifth wave in Copper and that we are likley to see the peak between 417 and 448. There is no change in that outlook for Copper. (On 8th December I posted a short-term chart from a different provider showing a 5-wave decline. Unfortunately, I have a feeling that there might be something wrong in that chart, because today’s image shows a 3-wave decline, which explains why we went up again to a new high). Anyway, in the big picture, we are still calling a top in the window mentioned above.

Copper has been strong because of demand from China. Lack of action on the interest rate front from China was also supporting copper prices, just as Gold hit a new record level. Many analysts are citing anticipated supply deficits next year as a reason why copper should remain firm. HOwever, be aware that the markets tend to discount such news and maybe all this is getting reflected in current prices. We shall see soon enough.

By the way, I have put back the links for free subscription by email and RSS reader at the top of this page. You may wish to alert your friends about this. Best wishes. Ramki

Dec 082010

On 2nd December I had presented elliott wave analysis suggesting that Copper futures would meet some resistance around 417, and hence buying some out-of-the-money puts near there might be an interesting trade idea. Surprise, today Reuters is reporting on copper that technicals are pointing to weaker prices after it hit record levels at 413. In the short term, look out for a 50% recovery of the dip from 413 to current lows. If prices start coming off quickly from there, you should join in. The initial target will be below 365. Good luck.

Dec 022010

Copper is making a 3-week high as base metals are rallying. Firmer global equity market and supportive economic data are cited for this move. Some are speaking of a looming deficit in copper supplies, expected to push prices to record highs. Do we have anything different to say? Yes. Not because we wish to be different, but because a five wave move is nearing completion. Take a look at the attached chart of Copper (The conituation contract). Elliott wave analysis of copper suggests that once we reach above 415 levels, there is a growing danger for prices to top out. The outer target is currently placed at 448. What could trigger a reversal up there? Honestly I haven’t the faintest idea. But I would urge traders and hedgers to be aware of the phenomenon witnessed in millions of chart patterns that when a five wave move finishes, we will get a correction of the entire move, usually back to the area of the prior 4th wave of one lesser degree. In the case of copper, this means a potential move of 25% down once we top out. The key question is when will we know that copper has actually topped out? It is hard to say at this point, but if one were to watch the intraday data, pehhaps he will be able to spot a mini 5th of the 5th of the 5th! But for most people the best way to deal with this is to wait for a sharp downmove, and sell on a recovery with stops above the high seen. That often works! Good luck.