David Fuller's view Yes, Eoin and I monitor the industrial metals very closely. We have seen some unusual volatility recently even for what we regularly describe as a volatile sector. Plenty of commentators have been bearish recently, mainly because they expect a slowdown in China. Given the recent corrections, I assume that some tracker fund long positions have been liquidated.

Here is what I said on 4th February, which you refer to above:

What next for industrial metals?

Good question! Analysis is always less difficult (I never say that anything in markets is easy) within a trend or following sustained breakouts from clearly defined tops or base formations. Analysis is most difficult, I find, when trends lose their consistency, as we have seen with some of these metals, which have a history of being quite volatile.

However, looking at the weekly charts, we can see that most of these metals are approaching their trend mean, represented by the rising 200-day moving averages. Several others have fallen back towards additional areas of potential support from prior trading ranges. The declines are rapidly becoming overstretched, nickel excepted, presumably because it had not been chased higher in the last few months so has been subjected to less selling pressure recently.

Weighing up the technical evidence, I think industrial metals are approaching a buying opportunity. At Fullermoney we often say: Don't pay up for commodities. If you want to buy, it is better to do so following corrections. However, this does not look like a little correction, so there could easily be a better buying opportunity. When markets fall rapidly, as we are also seeing with some stock markets, stepping in feels like trying to catch a falling knife. If you wish to do it, best to do so incrementally. I would be reluctant to short because we are still talking about countertrend moves rather than clear evidence of trend reversals.

Subsequently, most industrial metals fell a little further over the next day or two but have now had a good bounce, so it is worth reviewing the charts once again: aluminium (weekly & daily), copper (weekly & daily), lead (weekly & daily), nickel (weekly & daily), tin (weekly & daily) and zinc (weekly & daily). Aluminium has bounced from the upper region of previous extensive support and the psychological $2000 level. Copper has rebounded from the earlier consolidation evident below 300¢ and from just above the rising 200-day moving average. Lead fell slightly beneath its rising MA before rebounding strongly over the last seven days. Nickel bounced from its MA and has surged over the last seven days, clearing all but the August highs and reaching the psychological $20,000 level. Tin has rallied sharply from the upper side of its previous platform of support, the psychological $15,000 level and also the rising MA. Lastly, zinc has rebounded from a prior trading range, the rising MA and psychological $2000 level.

In conclusion, sharp corrections among industrial metals commenced with zinc's weekly key reversal in early January. These setbacks were much bigger than earlier reactions, with the exception of nickel which was previously less overextended relative to its MA. Strong rebounds from those MAs support an overall bullish hypothesis but technical damage during the correction indicates that industrial metals have now entered a more volatile and choppy phase of their recovery. Short-term indicators have moved from oversold to slightly overbought, so we can expect upward progress to become more laboured as the earlier recovery highs are approached. Nevertheless, I would give medium-term upside scope the benefit of the doubt, provided support is encountered above the recent reaction lows, as I expect, during any further volatility.

Lastly, in response to the second question above, I think too much is made of the "Dr Copper" theory, as it is just one indicator. However, strength in industrial metals supports the global economic recovery and growth hypothesis, and Fullermoney investment themes in particular.