DOLLAR DROP BOOSTS COMMODITIES -- AND STOCKS TIED TO THEM -- GOLD MOVES FURTHER ABOVE $2000 -- COPPER MINERS BREAK OUT -- SO DOES FREEPORT MCMORAN -- A STRONG COPPER MARKET IS A GOOD SIGN FOR THE GLOBAL ECONOMY

COPPER MINERS LEAD MATERIALS HIGHER... A falling dollar has been one of the big factors pushing commodity prices higher and stocks tied to them.   Today's drop in the greenback to another two-year low is continuing the flow of money into commodity assets.   Several messages over the last month have focused on the big rally in gold and silver and their miners.   And that rally continues with the price of gold moving further above $2000 today.   But other commodity groups are benefiting as well including energy and industrial metals.   I've also written about the price of copper rising and its miners along with it.   Today is another good example of that.   The Materials SPDR (XLB) is today's strongest sector.  While gold miners are a big reason why, copper miners are actually its strongest group today.

BULLISH BREAKOUTS... Chart 1 shows the Dow Jones Nonferrous Metals Index breaking through its 2020 highs to reach the highest level in more than a year.  That's a bullish breakout.   And two of its miners reflect that.  Chart 2 shows Freeport McMoran (FCX) climbing 10% today to achieve a bullish breakout of its own.  While Chart 3 shows Southern Copper (SCCO) close to doing the same.   While the buying of precious metals is often viewed as a potential negative warning for the stock market, the buying of industrial metals carries the opposite message.  That's because the rising price of copper could be a vote of confidence in global economy and stocks.

COPPER PRICE HAS BOTTOMED... The weekly chart of copper in Chart 4 looks like a major bottom is being formed.  The price of copper fell sharply during the first quarter (along with stocks) on the Covid-19 outbreak.  And it has been rising with stocks since the start of the second quarter.   The weekly bars (plotted through yesterday) show the red metal having broken through its early 2020 peak to establish a bullish breakout.   It also broke a falling resistance extending back two years.   It's now challenging the early 2019 peak near $3.00.  The two boxes along the bottom also show a potential "double bottom" pattern having formed between  2016 and 2020.  That's another technical reason to be positive on the industrial metal and shares tied to it.  The fact that global stock prices are rising is also encouraging.