This Doctor is having a heart attack

Heart attack can occur to anyone, including doctors of course. But I'm not here to tell you a story about how a doctor may get a heart attack. I'm talking about a special doctor who is having a serious heart attack at the moment, worth noting. It is Dr. Copper.

If this is the first time you hear about this, copper is called PhD Economy, a nickname widely used in the investment field for it. Why? Well, since copper is so widely used in virtually every corner of the economy, it is a good parameter reflecting the health of the economy, not locally but globally. Given its unique position that is less manipulated like oil, people often use copper as the leading indicator for the prospects of the global economy. Needless to say, when the economy is performing well, the demand is high and copper price is high as well. Vice versa, when copper price is dropping, it often indicates the trouble is coming for the economy and accordingly for the market potentially. So what's the copper price now? I guess not many people will pay attention to it, if not investing or trading anything related to copper. Here is its chart, an ECG for copper.

As you can see, the copper price was doing quite well last year but all the sudden it is plunging like a rocket stone. The major trigger is likely the ongoing widely spreading coronavirus pandemic. It should be easy to understand China is by far the largest consumer for copper (and most of other commodities as well) but China is virtually locked up with its economy halted at the moment. That's why Dr. Copper is crashing like having an acute heart attack right now. When Dr. Copper is sick, be careful what may be coming up next as it is a leading indicator and the overall impact may take some time to . While be felt. I certainly don't believe it is fatal or even life-threatening, but I do feel it is not a trivial event that should be ignored!! When I see people are euphorically chasing stocks again after being panicky to death just a couple of weeks ago, I must say those FOMOs will be killed again, probably soon! Wish you all the best if you are one of them!!

Tomorrow, I will share another angle why the market is prone to a sharp correction in the near future.