originally published Tuesday, December 24, 2019

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As we approach the end of the year, and of the decade, it is important to have something positive to look forward to. Exactly a hundred years ago, towards the end of 1919, Hitler was able to look forward to becoming the leader of the Third Reich, while our aspirations are somewhat more modest and include having a powerful bullmarket in copper to capitalize upon.

There are a number of compelling reasons to expect a major bullmarket in copper. For a start we have seen continuing robust consumption from China while mine supply has stagnated. Secondly, demand for copper for use in Solar and Wind alternative electricity generation is expected to grow steadily in coming years, especially Solar, and these technologies require the use of a lot of copper. Thirdly, due to onerous new legislation, electric vehicles are expected to take over from petrol driven vehicles on a grand scale as part of a master plan to eventually eliminate private transport for the masses, meaning the lower and most of the middle class, and all these millions of transitional electric vehicles will create enormous demand for copper. With regard to this last development, some discussion is in order.

As Eric Peters sets out in his singularly important article Diminished Combustion, the elites tried to get rid of cars for the masses with their “emissions standards” drive many years, but this effort ultimately failed because innovative engineers reduced emissions down to zero. Since it was then impossible to use emissions non-compliance as a means to get rid of cars for the masses, no matter how stringent the rules, they then came up with a new ruse, which is to classify carbon dioxide as an emission, and as anything that burns anything emits carbon dioxide, there is no way around this, and carbon dioxide emissions legislation has been introduced that will, as it is steadily tightened further, effectively outlaw petrol driven cars and force a shift to electric vehicles, which, sadly, the masses for the most part won’t be able to afford. They may be subsidized initially but will then become progressively more expensive so that the lower classes and most of the middle class won’t be able to afford to run them. I first came across Eric Peters’ most interesting articles on the war on private motoring in one of the few sites where you still read the truth, and his fascinating articles on the subject may also be read in his website. You may have observed how most all modern cars look the same, and are nearly all the same color – black, red, silver or white. This boring conformity means that it is now very difficult to find your car in a larger parking lot, unless you remember precisely where you left it, and I often have to take photos to find my vehicle. It can also be dangerous as I found out a few months ago when I tried to get into the wrong car in Sarasota, Florida, which resulted in its paranoid owner nearly pulling a gun on me.

One reason for all the hysteria over the climate is so that they can advance this agenda – to force the masses off the roads – and other agendas aimed at total control, like curbing international travel. This is not to say that the climate crisis is not real, you only have to look at the current fires in Australia and extreme drought conditions in central Chile and other places to see that it is, but the elites are going to use this crisis as a means to control and steer the masses in the way that they want to. The new teenage champion of the environment, Greta Thunberg, is a godsend to the elites, and her recent appearance on the cover of Time Magazine’s “Person of the Year” is the mark of their official endorsement of her – she could even find herself invited round to the Rothschild’s for afternoon tea. She is an idealistic pawn who can be used by the elites to appeal to the masses on a gut level and it certainly seems to be working, even if she did get caught out recently pretending to ride rough on a German train sat on the floor when she had a 1st class ticket. German railways got reprimanded for letting this slip out. The masses don’t like the effort of thinking things through, so Greta’s youthful emotive approach appeals to them – they’d better get used to taking the bus home after rallies, that’s all.

Looked at from the standpoint of the elites, it is certainly understandable why they would want to curb the mobility of the masses. First of all, people who move around a lot learn things, and they don’t want the masses learning more than is necessary for them to perform their function, and secondly it is unpleasant for the elites when they go to their favorite places like Florence and Venice to be trampled underfoot by teeming hordes of ordinary tourists.

Even though the number of vehicles on the roads will be reduced greatly when the shift from petrol to electric propulsion occurs, it will still result in a massive increase in demand for copper, as the number of electric vehicles in existence will explode (no pun intended Elon) in the interim phase before the prices of electric vehicles are ramped up.

Taking all of the other factors into account and given the current quite extreme supply constraints, it is easy to see why we are set for a “perfect storm” of demand for copper, and here it is worth noting the increased risks of copper mine strikes in Chile, which produces about a third of the world’s copper, could drive a spike in the price. The mine workers in Chile, faced with accelerating inflation after the recent troubles, will quickly resort to force (or perhaps lack of it) to try to ensure that their demands are met, meaning they are likely to walk out, which is the main negotiating tactic they employ.

What about the global economy collapsing as the everything bubble suddenly implodes, is that not a risk for the copper price? Well, it is, but as we have already discussed, they are going to try to keep the show on the road for as long as possible with massive QE – the US economy is booming, albeit underpinned as it is with all this printed money, and Trump will do everything in his power to keep it that way, and this inflationary printing will lead to a boom in commodity prices, not just copper but especially gold and silver of course. As for the Democrats, already looking disgraced with their scurrilous attempts to push Trump out of office by any means possible to please their Deep State masters in DC, they have already put their heads in the noose, and if the economy continues to roll, Trump will win by a landslide next Fall, and all the plastic surgery in the world won’t help Pelosi then. There is an interesting and timely article by Michael Snyder about the impeachment fiasco entitled This Is A Very Dark Day In American History. Also worth watching is this short speech in which Republican Clay Higgins of Louisiana presents a startling map, showing that Democratic support resides primarily in the centers of urban decay (as one would expect).

In order to partake of the boom in the copper sector, we will in due course be looking at a range of copper stocks, but we can look to get started in a relatively safe manner by means of a copper stocks ETF, the Global X Copper Miners ETF, code COPX. So we will now proceed to review its charts, on which we will quickly see that it is building up to something big.

But first we will quickly review the long-term 12-year chart for copper itself (this chart and interpretation added later on the 27th). On this chart we see that copper is in the late stages of a gigantic Cup & Handle base pattern that started to form way back in 2013. The pattern is believed to be complete, which is what the volume pattern on the COPX chart strongly suggests is the case, meaning that it is now looks ready to break out upside from the pattern into a major bullmarket. Note that although copper has marked out a Cup & Handle and COPX has instead completed a Head-and-Shoulders bottom, these patterns are not too dissimilar from each other. Note also that although copper should soon break out of its base pattern, it will be a break above the resistance shown on the chart that sees it really get moving.

Starting with the 12-year chart which shows all data for this vehicle, we see that about a year after it started trading, it peaked in common with many metals in 2011, and then went into a severe bearmarket which ended early in 2016 at the same time that gold and silver bottomed – gold has been placed at the top of this chart for direct comparison. However, also like gold, it is believed to have started a basing process as far back as 2013, when the Left Shoulder of the large suspected Head-and-Shoulders bottom shown started forming. If this is the case, then right now, even after the rally of the past few months, it is still relatively close to the Right Shoulder low of this pattern, and this being so it is a strong buy here. Robust support for this contention is afforded by the huge upside volume that has started to appear in recent weeks, which is viewed as evidence of Smart Money piling in, and by the fact that gold has already staged a clear breakout from its own Head-and-Shoulders bottom into a new bullmarket. Copper and COPX are still quite a long way from breaking out from theie respective base patterns, which in the case of COPX will happen when it breaks above the black line marking its upper boundary, and for good measure by it breaking out above the resistance level shown above that – once it accomplishes this it will be on its way. What this of course means is that we have a very good entry point here. Before leaving this chart, note the powerful surge in the On-balance Volume line in response to the recent heavy upside volume. This is a very bullish sign.

On the 2-year chart we can see the Right Shoulder area of the H&S bottom in much more detail. We can see that the uptrend in force from late August has so far failed to break it out of the larger downtrend that drove it down into the Right shoulder low. Once this is achieved we are likely to see considerable acceleration to the upside, and the big upside volume on the recent uptrend greatly increases the chances of this happening. The Accumulation line is shown on this chart, and as we can see it is very strong, another positive sign. Since it is still not heavily overbought (MACD), the current minor reaction is not expected to carry much further, and could end anytime now, especially given the recent heavy buying.

Lastly, we will look at recent action in detail on the 6-month chart. On this we can see that the uptrend that has taken it higher from the late August low has taken the form of a parabolic arc which promises to drive it higher at an accelerating rate. The last upleg early this month broke it above the still falling 200-day moving average, and if there is another upleg soon, as looks likely, then we will quickly see a bullish cross of the moving averages that will later lead to the 200-day turning up, which will mark the “official” start of the new bullmarket. Given the massive buying driving this latest upleg, it seems unlikely that it will react back much further, if at all, and given the enormous upside potential it is considered best for those interested in this to “take the plunge” and buy it as soon as possible, as hanging on in the hope of clipping a few pennies off the price is likely to result in missing the next upleg, which has a fair chance of being big.

In conclusion, Global X Copper Miners ETF is rated an immediate buy and is considered a sound long-term investment with very big upside potential. We will in due course be looking at some of the constituent stocks of this ETF.

Global X Copper Miners ETF webpage

Global X Copper Miners ETF, COPX on NYSE, trading at $19.84 at 10.45 am EST on 24th December 19.

Posted at 10.50 am EST on 24th December 19.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment or securities advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market technical analyst, Clive Maund is not a Registered Investment Advisor or Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.