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Is CALPERS Buying Putting Another top in for Copper?

|Includes: Freeport-McMoRan Inc. (FCX), GOCPF

I have to tell you that my old friend, Dr. Copper, the only commodity that has a PhD in economics, has decisively broken resistance at $2.25 and hit a new high for the year at $2.40, up 78% from the year’s low. If you recall, I was feverishly pounding on the table trying to get people to buy the red metal at $1.35 in January (see  ) . I also was pushing the world’s largest copper producer, Freeport McMoran (NYSE:FCX) at $30. Is this the definitive breakout that will lead us into the next leg of the global equity bull market? I don’t know, but there is one thing that makes me feel queasy. Our illustrious state’s public employee pension fund, CALPERS, has announced that it is again making asset allocations to the commodities area. When they did this a year ago, it all ended in tears, putting in the spike tops in every commodity across the board, followed by the mother of all crashes. California teachers saw their pension payments cut. You would think that once burned is twice forewarned. Is history about to repeat itself? CALPERS, with $170 billion in assets, down a third from the peak, it’s just too big to play in this space. This is the playground of end commodity producers and professional traders. It’s like sharing a very small cage with a very large, 800 pound gorilla, who, oops, is horny. All they can do is damage. Better for them to go back to being a closet global index fund. But keep an eye on Dr. Copper anyway.