Copper testing bounds of decade neckline

Copper is interestingly a great gauge of economic health coming from Asia, and also a relevant view on global growth / inflationary expectations. We've been battling two head and shoulder formations since the GFC. First, the very large commodity bubble formed a big head and shoulders that peaked roughly around 2012, a time where China had maxed out its credit expansion. We got a smaller head and shoulders in the post 2015-2016 deflationary episode that tested the original trendline and bounced during the 2016-2018 bull market.

The smaller head and shoulders finally broke down, which led to Copper testing the boundary of the bigger head and shoulders. I expect this to break, although there will likely be some testing of this first.

Note: this is not just a technical move. There are many fundamental reasons Copper is breaking down, mostly macro related to USD strength, asian weakness, over-expansion of Chinese credit, weakening demand, etc etc. Copper interestingly mirrors the Korean Kospi index very closely, and that is also breaking down from a major long term trendline right now. Expect more deflation, and some big market problems when this finally confirms the break of the lower trendline.