By Sheldon McIntyre
In the weekly charts shown below, Copper prices appear to be breaking out to the upside. Supporting this thesis is Copper’s strong correlation to Latin America (and the Emerging Markets). In short, a Copper breakout, coupled with a Latin America (shown below as Merrill Lynch Latin America Fund) breakout, would be bullish for Emerging Markets. And the Emerging Markets have been consolidating for the past four weeks, looking primed for a move to the upside.
As always, follow through will be key – especially for a Copper breakout. See charts below (and note that they are weekly charts).
Copper / Merrill Lynch Latin America Fund Weekly Charts:
Emerging Markets Weekly Chart:
No position in any of the securities mentioned at the time of publication.