Copper is at a key level and its direction may indicate where global equity and risk markets are headed in the next few weeks.  A break through short-term support may signal deeper problems in China’s economy.

We’re pretty bearish short-term on China’s prospects to make the transition to a domestic demand driven economy,  but do remain flexible.  At the end of the day, it’s not what we think but what the markets think.

Our bet is the official data will come in better than the HSBC Flash PMI and the markets will once again get lathered up about a soft landing.  Not that simple and too sheepish, in our opinion.   Watch if that rally fizzles.   This makes for very tricky entry points.

Stay tuned.

(click here if chart is not observable)