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Dennis Gartman: Copper Flirting with Dangerous Technical Levels

With copper giving up some of last week’s gains, are the metal—and by proxy the market—headed for trouble?

Strategic investor Dennis Gartman thinks if copper closes down sharply on Monday the market could be looking at trouble.

Gartman is watching the technicals and says copper is currently flirting with some key levels. “You start to break some very important short-term technical uptrend lines,” he said.

And as goes copper, so goes the market, he said. In fact, Gartman pointed out that the recent correlation between copper prices, crude oil prices and stock prices has been “unbelievable.”

“It’s almost tick for tick, minute by minute,” he said. “The correlation is very strong. And one should watch what’s going on in those three markets to figure out what the other ones are going to do."

While copper fell off a cliff for one day after reports that China was stockpiling the metal, it rallied back. Gartman thinks Monday’s downward slide is doing a lot more technical damage.

And while we need to pay attention to China, it’s difficult to really know what the country’s numbers are because they are so skewed.

“It is very disturbing” that copper’s turning back lower, Gartman said, particularly because the other base metals are doing exactly the same thing.


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