Dr. Copper Hints at Growth Reacceleration 🌤️ The Morning Print

Good morning! 

Small-caps are on the verge of a breakout, while the Copper/Gold ratio is nearing a move above its 50-week moving average.

Historically, this combination has been very bullish for the Russell 2000.

Let's take a closer look.

The way I learned it, "Dr. Copper" is never to be ignored.

When copper outperforms gold, it typically signals a stronger economic backdrop for equities, given copper’s ties to growth and industrial demand.

Looking at prior instances, three out of the four times copper has reclaimed its 50-week moving average relative to gold have coincided with breakouts in the Russell 2000.

In two of those cases, the move was reinforced by major RSI bullish divergences.

Now, we’re seeing all of these factors align once again.

The Russell 2000 is pressing against resistance, copper is approaching the 50-week ma, and momentum is confirming with a multi-year bullish divergence.

If history is any guide, this setup points to a potential move higher, with small-caps gearing up for a run into price discovery.