What Is Copper Telling Us? (JJC, FCX)

Copper continues to defy logic. The economic numbers lately have been getting weaker, bonds are getting stronger, stocks are getting weaker and copper continues to defy logic. So who's right here? Copper gained another 5 cents today to close at $3.43 per pound. Copper has been in a sharp upswing since early June, when it was trading around $2.70 per pound. Take a look at this chart to see the sharp runup. So if things are getting bleaker, than why is copper continuing to run like a marathon runner hyped on steroids and 5 hour energy drinks? I'm inclined to believe things aren't as bad as they appear, and that it's simply a summer slowdown, not anything more. This morning we saw the consumer spending number tick up at 0.4%, higher than expected. People are spending money and it's starting to show up in economic numbers. May and June were horrible months in terms of economic numbers and copper reflected that in April and May. At the beginning of June, copper started to reverse. You are seeing economic numbers for the month of July come in a bit better than expected, and I would expect August numbers to come in much better than expected. Copper has long proven to be a great indicator of the economy, and this time is no different. To capture gains here, investors would be wise to look at the Ipath Dow Jones Ubs Copper Total ETF JJC. Investors may also want to consider Freeport-McMoran Copper & Gold FCX which is holding its own, despite broader stock market weakness. Shares of the other major miners have performed similarly, indicating it's not just a company specific trend. As the economic numbers for August start to roll in, I would expect FCX to start to pick up steam and as such, investors may want to pick up shares before this happens. Disclosure: no positions Get free trades at tradeMONSTER!