COPPER

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GENERAL OVERVIEW OF COPPER MARKET

ISSUE DATE: MAY 23, 2006

These cycles copper is in are so extremely steep that the volatility is something the like of which we have not seen before. The elliptical cycles will rule despite this, it is just that for short periods of a day or two things may happen that wouldn't normally. Such a case is the close of May 23 so far above IC1. Normally, IC1 would hold the close inside for at least a day or two. The intra day high may have gone to nearly 390 as it did but the close should have returned to IC1. The fact is that the volatility is temporarily overriding powerful ellipse lines. However, it won't change the big picture. Even the high of May 11 was precisely on the HEC limit, testament to the power of these lines.

One of two things should happen very quickly from May 24. Either price has permanently broken up through IC1, in which case it will quickly go to target 1. Or, copper will quickly fall back inside IC1, trade across to target 2, finishing the IC1 cycle. Watch for a very fast rise to target 1 from this area, or a sudden and steep fall.

If price reaches the target 1 scenario, watch out for a cycle top at target 1. a fall to target 3 would follow, as would a series of very fast falls back to who knows where, but probably back to the starting prices of this bull market top, or around 200.00 as part of a bear market phase.