Cop­per Could Sig­nal what EM are Upto

Zambian Business Times - - FRONT PAGE - By Ro­drigo Garido

• Some ex­perts say cop­per can pre­dict turn­ing points in the global econ­omy. • There also seems to be a strong cor­re­la­tion be­tween cop­per and Emerg­ing Mar­kets stocks. • Fol­low cop­per in real time here. YOU of­ten hear peo­ple call it, "Dr. Cop­per". They say the metal has a Ph.D. in eco­nomics be­cause of its abil­ity to pre­dict turn­ing points in the global econ­omy. I'm not sure about all that, but I do see a strong cor­re­la­tion be­tween it and Emerg­ing Mar­ket stocks. To­day we're tak­ing a look at these two as­sets and why Cop­per's next move is likely to co­in­cide with the di­rec­tion of Emerg­ing Mar­ket stocks. Here is a chart of the Emerg­ing Mar­kets In­dex Fund $EEM at the top go­ing back 13 years. Plot­ted be­low it are Cop­per Fu­tures. No­tice how they pretty much look ex­actly the same: I think it's a pretty good bet to make here that what­ever Cop­per does, EM stocks will fol­low. Here is a closer look at Cop­per. The ques­tion is sim­ple: Is this a break­out from the 5-6-year down­trend on its way to retest those for­mer highs from 2006, 2008 and 2011 above 4? Or was this just a mean re­ver­sion and counter-trend rally within an on­go­ing down­trend?

A worker mon­i­tors a process in­side the plant at the cop­per re­fin­ery of Codelco Ven­tanas in Ven­tanas city, north­west of San­ti­ago.


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