I was asked my thoughts on copper tonight so I figured that I’d share my opinion here, as copper has historically been considered one the most important leading indicators for the health of the global economy.  My reply below:$copper daily

Both scenarios presented.  Tough call but trying to be as neutral/unbiased as possible, I would give the edge to the recent price action (bull trap) which is bearish over the historically reliable oversold buy signal.  Keep in mind that oversold as a buy signal will typically work during a bull market, as we’ve had since early ’09.  One day, just like overbought gets more overbought in a bull market, we are going to start seeing oversold become even more oversold or stay oversold for longer than expected.  That will be one of the first signals that the bear has emerged from hibernation.  Too early to say that time has come yet but I’ll be watching copper and the gold stocks closely here for some possible early signs of this as both are currently at rarely seen oversold levels that have historically accompanied lasting bottoms.