Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Copper: Elliott Wave Counts 4th Dec 2017

|Includes: CPER, iPath Pure Beta Copper ETN (CUPM), JJCTF
Summary

The latest downtrend for Copper (wave i) unfolds in 5 waves.

The downtrend after uptrend wave (5) is classified as a "Leading Diagonal".

Copper is in a new downtrend.

Alternate Count for Copper is just as likely now and may be the more fundamentally preferred count given S&P strength.

Copper Hrly Elliott wave counts 4th Dec 2017 I had previously thought that Copper is in a new uptrend but the unfolding of the down move reduced that possibility until I re-label my counts, changing my previous W-X-Y to a leading diagonal. 

As of now, this is really a better count because it allows for both upside and downside target. How will I know which is the correct one? 

Downtrend: If price breaks new low

Yes. If price breaks to new low, we have a case for the primary count to be used. This is simply because of the rule that wave 2 can never retrace more than 100% of wave 1. 

Uptrend: 5 clear wave up

A new uptrend may be clear once we can see a clear 5 waves up. But take note that it may still not be a clear uptrend because a 5-3-5 can also be classified (correctly) as an A-B-C.

How to trade this

I will prefer to trade this on the long side for now, meaning, using the alternate count. The reason is simple: because I have a clearly defined risk (or a lower risk) when I go long (which is just below the recent low). But if I trade on the short side, the stop loss is too far above (note that wave 2 CAN and DO retrace 100% of wave 1). 

This is also on the backdrop that S&P is moving very strongly up (despite the Chinese and Japanese markets displaying weaker performance). Until the trend changes, it may be best to just follow it.