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Copper and oil singing the songs of recession – an interesting relationship that predicted global recession before
Joe Weinman
May 29, 2007
The copper tops out first, the stock markets keep rising, oil is stubborn although at a much lower level from the spiky peak – it matches with the current scenario. In the past such scenarios met with serious global recessions in the past.
The copper always sends the first R signal. It is also an excellent predictor of recovery. What makes these signals very interesting is the cross-compiled direct or inverse correlation. The analytics show the signs of recession looming from the signs of weak copper, stubborn oil, and rising stock market.
In the early stage of the recession, the stock market actually accelerates and bond market gets confused. But the differential between rise and sidewise movement in oil and the collapse in copper prices show the bullish sentiment in the economy and equally weak fundamentals.
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