Email of the day
Comment of the Day

December 20 2012

Commentary by Eoin Treacy

Email of the day

on copper and UK house prices:
“I am enjoying putting the seminar material into practice.

“On Copper CMX, it seems to be making a triangulation pattern (as you discussed in the Chart Seminar) since Oct'11 (or maybe even Jun'10). This appears to be coming to a head very soon with the range now tightened to 345 - 368. Therefore I take it we can expect to see Copper make a sharp move up or down very soon (more likely up with fundamentals onside)?

“Also, you mentioned you would look out for a chart related to London property - any luck with this? - I am concerned with prior investments in zones 3 & 6.”

Eoin Treacy's view Thank you for this email and we are delighted you found The Chart Seminar beneficial to your investment process. As you point out, there is a clear progression of lower rally highs from the 2011 peak in Comex Copper and a progression of higher reaction lows from the September 2011 nadir. A clear break in either sequence would likely result in a substantial additional move in the direction of the breakout. As copper pulls back from 370¢, it will need to find support above or in the region of 340¢ to give credence to the bullish hypothesis.

I updated the UK Nationwide House Prices All Houses Index because it has the most back history. Here is a log scale chart over the last 40 years. Since excess supply was not a factor in the UK's housing pullback, prices have not experienced the same declines as property markets in Ireland and Spain. The Index remains in a range, potentially similar to that posted in the 1990s. However it will need to post a progression of higher reaction lows to demonstrate a return to demand dominance.

Back to top