Friday, September 16, 2011

Dr. Copper

It is bounce or bust time for Dr. Copper. We have written in the past that copper should be followed as a barometer of global growth. Therefore it is worrisome that the metal has underperformed this week as the equity market recorded five straight days of gains.

Only time will tell, but there are a few warning signs in inter-market relationships. Not only has copper failed to move higher, but financial stocks continue to underperform the equity benchmarks and emerging market stocks continue to underperform domestic equity. There are a few good signs like the Nasdaq Q’s leading higher and semiconductors rallying, but I still feel the weight is negative.