Copper Drops Like A Rock
Many traders and investors consider copper to be a leading indicator for the stock market. The legendary trader, Jesse Livermore, used to say that a strong copper market was a sign of a strong stock market. When copper declined sharply it was a sign a weak stock market ahead. Today, many of the leading copper stocks are trading sharply lower.
Southern Copper Corp.(NYSE:SCCO) is leading copper producer that is trading lower by 0.95 cents to $39.80 a share. This stock topped out on January 3, 2011 at $50.35 a share. This stock has now declined lower by 20.0 percent from its January high. The stock remains weak on the daily chart and may test the $38.00 level which is the next important daily chart support area. Day traders can look for intra-day support around the $39.50 area.
Freeport McMoRan Copper & Gold Inc.(NYSE:FCX) is the worlds largest copper producer. This stock is often viewed as a copper ETF because of its popularity by traders and investors. FCX stock will have some intra-day support around the $48.00 level, however, the stock remains weak on all time frames and could trade lower in the coming days.
The iPath DJ-UBS Copper TR Sub-Index ETN (NYSE:JJC) is trading lower by $1.80 to $55.79 a share. The JJC tracks the action in copper. JJC had very good daily chart support around the $56.00 level, however, that level has been breached today. The JJC is now in a bearish technical position on the daily chart. Intra-day trader can watch for support around the $55.00 level. This is an intra-day level where the JJC can see a bounce. As for the daily chart the $54.00 level is the next decent support area for JJC.