A Critical Level for Copper

Despite the crisis in Europe… despite high U.S. unemployment… and despite some recent poor economic data from China, copper is still holding above an important price level.
Regular readers know we look at copper when we want an “instant read” on the global economy. The red metal is in nearly everything around you… from cars to refrigerators, locomotives, and homes. This “in everything” quality makes copper rise and fall with the pace of global economic activity.
#-ad_banner-#Like most assets, copper soared off its depressed levels of early 2009. It gained more than 260% from its bottom to its high near $4.63 a pound early this year. Then it began an eight-month slide that saw it drop as low as $3.07 a pound.
Keep an eye on this $3.07 level for copper. For the last two months, it’s been holding above that low. As long as this vital building ingredient continues to do so, one has to say “things can’t be all that bad” in the world. But a break below $3.07 says the bearish news you read in the paper is about to get worse.