Copper is Probably in the Critical Decision Wave of the Blue Price Channel
A reader requested a copper chart and here it is:
Copper’s a little murky because there’s a price channel on the chart, but there is more than one way to draw it. My own preferred channel is the bright blue one on the chart. That’s because I don’t include waves of triangles (pink) in price channels. The gray price channel would already have elected to start a bottom. The bottom would probably have lower lows to come, but the move down in copper would be near an end.
My preferred blue price channel, by contrast, keeps all options on the table. The blue channel is completing its critical decision wave, where the price is either putting in the first wave of a bottoming pattern (purple scenario in chart below) or setting up a breakout downwards from the channel into a meltdown (green scenario in chart below).
Copper Melt-Down vs Bottoming Scenarios
A melt-down set-up would almost always break the blue channel bottom here before heading up back into the channel in a partial retrace. Then the price would break out past the first breakout low, and you’re off. A melt-down set-up could also put in a bigger break here through the blue price channel bottom and then retrace only enough to tag the channel bottom before breaking out past the first breakout low.
A bottoming set-up would usually reverse on the channel bottom without any breakout or only a small pierce of the bottom. Then the price would usually retrace all the way to the channel top before putting in a lower low. Sometimes you’ll see a critical decision wave that’s going to start a bottom put in a little falling wedge against or across the channel bottom before starting up to the channel top.