Copper passed 10Y high in crazy mode with inflation issue ahead!Hello everyone. The previous bullish setup of copper worked very well.
What's behind the bullish setup other than technical structure? It's inflation!
It looks a dead loop! The disappointed employment data released last Friday obviously postponed the time of interest rate hike. That's good news for stock market temporarily at least. We can see how NQ reacted to it.
However, investors started to realize that we got an issue here this time. After one year of incredible loose monetary policy, things are becoming expensive. If you check the property prices around the world, you will know what I mean. Let's take New Zealand for example, property prices has surged by approximately 20%. That's a signal. Look at crude oil rebound from negative price to $65 per barrel. The list goes on and on.
Copper is just one of them. It surpassed its 10Y high recently. Look at the rising angle. It's crazy. How long will it go up in that way? I don't know. What I know is that copper is wildly used in our daily life. The surge will lead to prices of other things to go up. In the end, everything becomes expensive.
Don't worry. until now, the inflation is still low. My personal warning line is 4%. If the PCE is firmly above that level, shit will happen. Central banks are likely to raise interest rate to handle the inflation issue. What if the economy still in the deep shit? I really really hope that won't happen. If it does, buy gold, properties, commodities and reduce your exposure to stocks, bond and cash.
Will the economy back to track before inflation rise? Let's see!
