The Copper Top

Same setup as in 2011. To my eye, copper looks stronger now chartwise, but the monthly shows a similar topping process in both time and form. Back then, the perceived fundamentals were strong. People expected strong growth and continued stimulus from China. Today, the situation is similar. People expect government will invest in the electrification of transportation networks. Back in 2011, China said no more to stimulus. Today, high inflation is also causing voters and politicians to rethink it. The deciding factor may be the central banks. What is different about this time is the Federal Reserve isn't pushing ahead with ending QE in a matter of fact way. They increased the balance sheet in December far more than they said they would. The are sounding dovish. Oil and natural gas exploded higher after Powell's Senate confirmation hearing. They are sending the wrong signals to the market if they want inflation coming out of the system. As always, the charts are the best way to cut through the noise. They defeat whatever justifications, however logical, argue for a rise or fall in commodity prices. If forced, I would bet commodity prices will eventually come down like in 2011 and 2014, but I'll be ready to toss all that out the window if there be breakouts.