Copper's downward trend foreshadows a stock market collapse, according to Societe Generale's famously bearish strategist Albert Edwards, who said equity markets will riot "Japan-style."
"Copper is acting exactly as it did when I wrote about the impotence of liquidity in the face of the (then imminent) 2007 recession. Once again it is giving us an early warning that liquidity will not save risk assets: time to get out of equities," Edwards wrote in his latest research note, on Thursday.
(Read More: Dow Record 'Eerily Similar' to 2007: Albert Edwards)
Copper is viewed by some analysts as a signal of turning points in the world economy, as well as an indicator of whether it is safe to buy cyclical industrial stocks.
Three-month copper prices rallied 2.45 percent on Friday morning in London,but the metal is down 18.6 percent so far this year.
Commodities trader Dennis Gartman agreed with the view that downward movements in copper and other base metals are a bad sign for the global economy.
"The base metals do speak loudly, and they're speaking very bearishly," Gartman, who edits The Gartman Letter, told CNBC on Wednesday.
(Read More: 'Dr. Copper Is Sick': Dennis Gartman)
Despite the signal, Edwards said investors remain bullish on stocks due to the ample supply of central bank liquidity in the market, just as in 2007.
"In a note back then we said that this was a false crutch for investors and that the liquidity would vanish from the markets if price momentum took a turn for the worse. I have exactly the same view now. In the same way that quantitative easing seems, in large part, to be bypassing the real economy, liquidity will evaporate from equities if we dive into a deflationary recession," he said.
However, Stephen Weiss of Short Hills Capital denied copper's shift downwards was a bearish sign for the economy.
"Copper is purely an indication of oversupply in the channel," he said."That's true of iron ore. That's true of the other metals, as well as China slowing," Weiss told CNBC.
(Read More: 'Talk of Dr. Copper Is Crap': Weiss)
—By CNBC's Katy Barnato