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Thursday, April 4, 2013

The global economy through the markets eyes 4/4

I have heard a number of pundits on TV talking about a pick in the global economy.  Is that really the case?  Lets see what the charts say starting with old Dr. Copper.

JJC has been forming a triangle pattern for a very long time.  It clearly broke to the downside over the last three weeks.  Today it closed below its 2012 low.  If the global economy was about to pick up it should have bounced off that lower trend line.  The break down should be signaling more slow down ahead.  Lets look at the BRIC ETF.

That has a very similar shape to the copper chart.  It has not broken down completely yet though.  Do you see any sign of a pickup in those economies in this chart?  I sure don't.  How about steel.

The steel ETF is approaching its 2011 and 2012 lows.  Does it look like steel demand is picking up to you?  What about aluminum?

This ETF has broken down below its 2012 lows.  No sign of economic pick up there.

The metals are at the bottom of the food chain for economic activity.  It looks like the odds of the global economic data showing more weakness instead of strength seem to be pretty high to me.  I can see why so many more companies are lowering guidance then raising it.  I guess we will see if stocks and reality come together or not.


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