Is 'Doc Copper' Predicting Severe Inflation?

December 5, 2016

Doc Copper has swung wildly since November’s moon shot and seems likely, on the visually evidence of the charts, to attempt another spectacular leap. Assuming the gyrations of the last three weeks have been a consolidation for a follow-through rally, notice that much of the action has taken place just beneath the November peak. That bulls mean business is further affirmed by the slight penetration of the November peak on the second run-up. However, unless it is the return of severe inflation that copper is predicting, the correction will probably need to take out the key low at  2.4260 (see inset) to give a second-wind rally some running room.

Although I have serious doubts that serious inflation is possible in an economic world that has amassed debts aggregating to more than a quadrillion dollars, I will let the chart speak for itself in the weeks and months ahead. In the meantime, for trading purposes, the sale of option straddles targeted on the 2.50 strike seems like a good bet.

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Peru became the world’s largest producer of silver in 2012.