Copper, Commodities Bottom in 2015
1/02/15 INSIIDE Track: “From 2007 into 2011, most commodity markets (and related inflationary indicators) experienced a blow-off advance. Some peaked earlier. Some later. But 2011 was really the turning point. It was – as described leading into that year and then throughout that year – a ’Date with Destiny’, when Gold & Silver, Coffee, Cotton & Crude reached a pivotal turning point.
Gold & Silver were forecast to set Major peaks in 2011 and enter 1-2 year & 3-5 year declines. Leading into that period, a weak Dollar was becoming a scarier & scarier proposition. So, a steadily weakening Euro – and strengthening Dollar – became the correlation of choice.
But, don’t let that fool you. Traders… and bankers… and politicians… and the media… and the various talking heads are a fickle lot. What tickles their fancy one day, terrorizes them into fear the next. But, that usually only occurs at the extremities.
…Enter 2015…
For several years, I have surmised that Europe still had to go through more pain before there was any realistic chance of progress (an often hard-to-define term). That conclusion was based partially on human nature – and a study of history – and partially on the charts, which projected a Euro drop to 1.1000/EC or below.
When the Euro was approaching 1.5000/EC (in 2011) and 1.4000/EC (in April/May 2014), it was hard to imagine the Euro at 1.1000/EC. But those were the times when this forecast was reiterated so that traders would not lose sight of the bigger picture. And now that the Euro has dropped below 1.2000/EC, it does not seem so impossible.
Up until now, that decline – since May 2014 – has been more on ‘moderate’ fear or concern. Escalating tensions between Russia and her neighbors, magnifying economic malaise in Greece & other EU nations and the revived perception that the Dollar was now the healthiest horse in the glue factory pressured the Euro to where it is now.
But 2015 is likely to be the year of fruition. Those fears, anxieties, concerns & anticipations are likely to take form and validate what the charts have been projecting since 2008, 2011 & May 2014.
The first move is usually on fear – when only the technicals pick it up. The final move is when the fundamentals reach fruition and everybody recognizes what’s going on. So, in 2015, hold on tight!
Copper remains in an intra-year downtrend that could carry it lower into Feb. 2015 – the next phase of a 20-month low (Feb. 2010)–low (Oct. 2011)–low (June 2013)–low (Feb. 2015) Cycle Progression. Just as Copper was one of the first commodities to top in 2011, it could be one of the first to bottom in 2015…
Live Cattle is in what is expected to be the culmination of a 40-Year Cycle of inflationary advance – projected to peak in 2014/2015. That is also the time when corresponding 3-year, 6-year & 12-year Cycle Progressions project a Major peak. Cattle has already turned its weekly trend down and is giving the normal reactive bounce. If this bounce peaks at/below 170.00/LC, Cattle could see another 2–4 week decline. Primary focus – for 1Q 2015 – is on a convergence of intermediate & geometric cycles around February 19th or 20th…
Cocoa has dropped sharply since setting a peak in September and perpetuating a ~9-month low (June 2012)–low (March 2013)–high (Dec. 2013)–high (Sept. 2014) Cycle Progression while producing a peak that is 2 years from its mid-Sept. 2012 high that was 2 years from its mid-Sept. 2010 low. The next phase of that ~9-month cycle comes into play in June 2015.
The Sept. peak was expected to spur a drop into mid-Nov. and down to 2744–2853/CC. Cocoa fulfilled both of these and projected consolidation into year-end. It has rebounded to test & hold its monthly LHR (in December) and could now see a drop to ~2743/CCH in January (the monthly HLS) IF it can give a daily close below 2880/CCH. That would also trigger an overall decline to ~2650/CCH – the intermediate HHL objective and a range-projection target.”
Copper, Cattle & Cocoa poised for Feb. 2015 lows… and onset of inflationary rally. Other commodities to follow, between March–July 2015.