See previous blogs on this one. The big picture has served us well and we are not about to change that. In fact, over and above the EW count, a head & shoulder pattern can be seen that adds considerable credibility to the general direction. What we did get wrong is the size of the a-b-c rebound from the Oct. lows. It runs from about $40 to $70 and could have been complete at $62.5 but wasn’t. Swings of $30 or 75% of the value at that time are completely unwarranted in terms of the need for copper in China or elsewhere. This swings would appear to be the collateral of Central Bank interference combined with a black/white investor community, or risk on / risk off if you prefer. In any event the $40 rebound was taken back rapidly in the next 5 months.

Right now , from the big picture , we have to assume that this stock will go lower. However, from the more detailed chart this outcome, at this time, is not a given. The leg we are presently in should be wave 3 of C, usually the longest (with commodities it is often wave 5). If that is the case than the count in blue might be applicable. Otherwise the count in black might apply. In short it would be a good time to stand aside. Notice that we are right on the “neckline” and some resistance should be expected as a result. The problem here is that if the stock goes up now there would be overlap. This could only be if we are in the process of developing a diagonal, read wedge, wave C. Stand aside for now.