Copper Continues To Show Risk On

If you look at a

you wouldn't know the world is ending in Europe. Sure, we dropped from nearly $4.50 per pound at the end of July, beginning to almost $3.80 per pound just a few days later in August. Since that low in August, we have seen a somewhat shaky, climb higher. We touched a technical level of $4.225 on August 31, bounced off that and found support at $4.02 last week. It has not been a steady climb higher, as we saw earlier in the year, but the fact that copper has not broken down below the $4 level with all of the turmoil in Europe is an encouraging sign. Over the past month, the iPath Dow Jones-UBS Copper Subindex Total Return ETN

has lost just 0.4%, while the S&P 500 ETF

has lost 0.3%. If you go further back though, you begin to see the stability in the price of copper. Over a three month horizon, JJC has lost 1.5%, while the SPY has lost almost 7%. Copper hanging out above $4 is not the most bullish indicator we have ever seen, but it is certainly not indicative of an economic collapse, which many are calling for. The good doctor appears to be telling us something. That we are in for a slow, albeit bumpy recovery for quarters to come.