Major chart top in Copper — target is 350

Bear flag retest of diamond top is turning down

Two chart observations are worthy of note on the nearby daily futures graph. First, the decline in early May completed a 4+ month diamond top. This is a major reversal pattern. Second, the rally from the May 12 low is tracing out a bear flag. The decline today may indicate that the May 31 high will be the high of the flag.

The weekly chart of JJC, the Copper ETF, shows that the dominant trendline from the late 2008 bottom has been violated. Keep in mind, the violation of a bull trendline is not, in and of itself, a bearish signal. It does recognize that a trend change is in the process of developing.

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