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Warning Signs in Copper: McClellan

Price action in copper and in General Electric stock suggests the market is headed for a downturn, Tom McClellan of the McClellan Report said Wednesday on CNBC's "Fast Money."

"Copper is something that behaves mostly like the stock market," he said, adding that since 2007 the industrial metal has performed more like a financial asset.

But as stocks hover near all-time highs, copper is close to making a new low for the year, McClellan said.

The S&P 500 closed within 4 points of its high.

"It's a sign that people are a little bit too much invested emotionally in the subtrend and don't think it can go down, and copper says they're probably going to be proven wrong here in just a short time," he said.

McClellan called the divergence important.

"The stock market's doing great because the Fed's pumping money out there, but there are signs of suffering elsewhere," he said.

The other indicator McClellan noted was action in General Electric.

"GE tends to top before the Dow was, and GE is not making higher highs along with the Dow," he said.

The Dow Jones Industrial Average closed up for the day, briefly setting a new all-time high of 14,546.82 intraday.

McClellan called the price divergence between GE and the Dow problematic.

"It's a sign that people are a little bit too much invested emotionally in the subtrend and don't think it can go down, and copper says they're probably going to be proven wrong here in just a short time."

Trader disclosure: On March 20, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long MSFT; Brian Kelly is long S&P ; Brian Kelly is long GOLD; Brian Kelly is long SILVER; Brian Kelly is long TREASURIES; Brian Kelly is short Copper; Brian Kelly is short Oil; JJ Kinahan is long AAPL; JJ Kinahan is long BAC; JJ Kinahan is short GS puts; JJ Kinahan is short WFC puts; JJ Kinahan is long CSCO; JJ Kinahan is short FB Calls; JJ Kinahan is long MSFT.

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