Dr. Copper and Market

- I don't need no doctor, 'cause I know what's ailing me. I've been too long away from my baby, ahh!        I'm coming down with misery. I don't need no doctor...

- Ray Charles

Third Component

Our last two pieces dealt with the most important commodities (oil) and the best commodity (gold) for your economy and currency. However, central to both and next in importance is copper. The good doctor is needed for almost everything. At the moment, with the race to build data centers for AI, the demand is exceeding production. Silver and copper mines cannot need global demand. That alone should tell you everything that you need to know. It is why Barrick, the second largest gold miner, is developing the Reko-Dig Copper/Gold Project in Pakistan. It could become one of the largest copper mines in the world. At the moment, Chile produces the most copper for world supply.

Hold the Press!

Not everything is rosy for the red metal. US housing is in a slump and the outlook asks, what is lower than a slump? Mortgage rates rose over 7% which in itself is not bad, but since the medium home cost, from Redfin data is $407,730, affordability is falling off the cliff. If you want perspective on that, here is the math. First off, very few home seekers, especially first time buyers, can save the 10% to 20% down. So, let us do a VA, no down paynnt loan. 

Your monthly payment P/I is $2,707.78. Of course, you have to add insurance and taxes. To qualify, your weekly paycheck must cover the monthly P/I. This equates to a solid job that pays $100,000 per year. In addition, you must be debt free, no $30 grand car payment or student loans. So, what is lower than the housing slump? In baseball, it is the bench or back to the minors. For new home buyers, it is renewing their apartment lease. In addition, if the Fed hikes today, everything gets more expensive. A quarter point won't stop inflation, but it will strengthen the dollar. This is only temporary, stopgap measure. This brings us back to copper. It is losing its biggest user, but at the moment, data centers are covering that loss. 

Other Factors

Miners use diesel fuel. It hit its highest price level last week. (over $6.) This is a big negative along with payroll and the cost to find, dig and retrieve the metal. However, Mr. Market has given miners incentive by raising the price for copper to a new, all-time high last week at $6.80. It immediately fell and is in retracement at this time. How far does it fall is the question? Dear Reader, this could be a blessing in disguise. Doctor Copper had many house calls with gaps in pricing. The producers value rises and falls with the commodity price. The first test will be at the 50-day moving average ($6.46) and then, the 200-day around $6.02. We should hope it falls back to its consolidation range at around $5.60. This leads us to the copper stocks.

Southern Copper (SCCO) is the largest miner from Chile. It rose in anticipation to a new, all-time high at $220. It fell with copper's price to close last Friday at $193.49. A good entry point would be at $170, just below the 200-day moving average at $175.

Freeport-McRan (FXC) is a dual commodity producer. Its large mine has both gold and copper. It too hit a high at $80, but has retraced to $71. Its 200-day average is $61 and we see it consolidating in that range level. If you entered at $40 last December, thank the Lord.

Trekor Metals (TGB) did a name change when its new mine came into production. This is a personality stock. It follows the price of copper. When it falls, this firm crashes. It has touched $2 bucks, repeatedly. That is the time to enter and sell when it hits a high. At its present price level, we would not be interested.

Capstone Copper (CSCCF) is a miner to watch. We have. We were hoping to enter around $8.00 last April, but we missed. Strike one! It rose quickly to $11.50 and retraced. It never reached the April low and we missed again. Strike two! Recently, it climbed to $12.00 last week and fell with the price of copper. We are buyers at $8.00 to $8.25. This Canadian firm has three producing mines. One is in Arizona with another one in Mexico and the last in the big producing region in Chile. Earnings date is 30 October. Forecast is slightly less revenue, but big rises in the following quarters. Lastly, 16 out of 20 analysts have a buy recommendation on Capstone for a $18 price in Canadian money. Nice...Peace.

Golden Time

- All that glitters is not gold.

- An aphorism used by John Florio and William Shakespeare.

Cycle

We told you over a year ago that gold has a 12-year cycle. The last down version was in 2024 to which started the new cycle. It took less than two years (January 2026) to establish a new record high that broke over $5,000 to 5,600. In addition, like seasonal buying, hiring or selling and layoffs, gold is entering its seasonal buying period (end of August to early February).

4-Seasons

No, not the singing group although we love them. We are talking nature's cycle. Some people love the spring and some the summer, but we like the fall because His nature gives us such beautiful colors. It just so happens that baseball has its championship and football begins. We love it all and if you throw in some upside with gold, we say, "Praise, the Lord!" PS: Sorry, winter. As a kid, it was my favorite, but as an adult, no way, Jose.

Right on Cue

You may think that gold is down, but you would be wrong. The charts indicate the seasonal buying in gold. It did fall, but with war, trade wars, inflation and $40 trillion of debt, it is rising. The charts show that when it fell, it held around the $4,000 price level (give or take a daily price change). We stated that gold could fall to a $3,800 to $4,200 range. We pat ourselves on the back. Now, we see a new range level. The low around $4,200 to $4,750. Monthly, resistance is at $4,800. If it pierces that level, a test of the record high is coming. We can see this clearly in the ETFs for gold.

GLD...

...is the ETF for gold. It has broken out at $380 and hit $430. It retraced to $400. The next target is $440. Follow the 50-day (388) and 200-day (406) moving average. The sign that you want to see is the 50-day crossong over the 200-day.

GDX...

...is the gold miners index (ETF). It broke out at $80 to hit $105. It is now retracing. It should rise to challenge the all-time high at $117. 

We Like...

The same three miners that we mentioned in the past: Newmont, Barrick and Alamos Gold. Newmont and Barrick have very low P/E ratio. Any dollar weakness and they will rise, very high. They all pay a dividend. However, as always we worry about recommending a firm because if we are wrong, we feel a mental pain. With that said, we believe in the three above with one new, lower price company. It is an explorer. It does have income with a producing mine. The real benefit is its control of a mine in the top producing region in Nevada. Newmont and Barrick have adjacent mines. Some big names in gold are attached to it like Sprott and Peter Schiff. Scorpio Gold (SRCRF) had 5x the volume last week. Needless to say the stock rocketed from $.21 to $.61 cents. It retraced to $.26 cents. A good entry point would be between $.24 to $.26 cents. Also, there is the possibility of it being a takeover as it has all its permits and drilling results which are very good...Peace.

Energy Trends

- Nearly all men can stand adversity, but if you want to test his character, give him power.

- Abraham Lincoln

New Players

We all know the teams that comprise the energy oil sector. The world has national firms while the US has individual giants. Then, there is OPEC, but it is losing its influence. Teams that are not allowed into the global league are Russia and Iran. There are fringe teams like China, Venezuela, et al. 

While we have a fairly accurate amount of barrels produced daily and used daily, the stats change with supply and demand. It is no secret that the Hormuz Strait is central. The US/Israel vs. Iran conflict has damaged global needs. The US policy caused the problem. The initial deficits in oil supply caused a severe shock to the global oil league. However, supply passing through the strait is climbing. It is now 16- million barrels of oil per day (BPD). The old level is 24-million. 

Richer nations like the US and China had a national reserve while the remaining nations used their alternative sources. The conflict may continue, but behind the scenes, the smart teams are preparing for the future. We see a new pipeline in the region. Trump is so wrong to be against wind and solar, but that discussion is for another time. There are some "free agents" out there and they will change the energy league in the future.

Enter...

...Amazon has worked three nuclear deals this past year and it is not over yet. They want power for their AI data centers.

Microsoft is pushing to revive Three Mile Island nuclear plant.

Google is seeking partners in small, nuclear reactors. Meta is in the same market.

Beside being tech firms, they have something else in common. A quest for energy, specifically, nuclear. The US energy grid is short capacity. It will need an additional 35 gigawatts of electricity by 2030. 

Digress

Amazon signed a nuclear deal with Energy Northwest in Washington. They covered the South with Dominion of Virginia. It made a partnership with X-Energy to build more than 5 gigawatts of new, small nuclear power by 2039. Microsoft signed a 20-year PPA to take all the output of Three Mile Island. This will cover its data centers in Pennsylvania, Chicago, Virginia, and Ohio. These tech firms are developing their own source of power. Soon, their league will have Google and Meta energy firms.

Oil League

OPEC was once its king, but it is no longer number one. The US leads the world in oil production with 13.8 million bpd. and climbing. OPEC is removing its oil cuts. There will be more oil available in the future, but things change quickly. The suggested "toll" on the strait will only cause more conflict. It will not happen. So, where does the price of oil go? The charts indicate a rising price pattern. Brent started at $72 with a recent high at $95. We see some type of consolidation. WTIC, also shows a rising price channel. The low at $67 and its recent high at $92. It too will find a range. This will pertain to demand. The "old" level of 104-105 million bpd is the basis for oil's price action. The conflict is subject to politics. This is never good. There are a few wildcards. China's connection to Iran. Russia supplying oil to China and India and gas to Germany for winter. The new US policy with Venezuela. Politics is never good.

Related

US and world consumers get hurt with rising oil prices. In addition, necessities like food rise through shipping and production costs. The biggest unmentioned costs in the US is mortgage rates. In February, the 30-year rate was 5.99%. On Monday, it was 6.87%. This is 10% higher and consumers pay this rise in cost for 30-years...Peace.

Odds and Ends: August 2026

- It's not what you look at that matters, it is what you see.

- Henry David Thoreau

Treasury Secretary,

Scott Bessent is the poster child for the elite. The stupidest and most risky thing that you can do with your money is to enter currency. The secretary just wasted millions, no billions of our taxpayer money to prop up the Japanese currency. By doing this, you get a few days of relief with international trading, but whatever the trend was and the reasons behind it, will resurface. Bessent attempts to catch a falling knife.

It gets worse...

Since the Federal Reserve did not lower our interest rate, Bessent enacted his own form of QE. He wastes billions more of our taxes to buy "old" long-term bonds to lower rates. How stupid is that? He spends borrowed money to buy notes that used borrowed money (can you say, rollover) to present an economic picture that all is well. Is this what they teach (Yale) in the Ivy League? It is no wonder how our national deficit ballooned past $40 trillion and counting...He goes on to say these famous last words, "Most probably (expression to cover his ass), our budget deficit under President Trump has peaked."

Repercussions

The world will stop buying our debt because they will see that the BS of Republican Conservatism is just that, talk. They also see our debt growing at 7% while our economy shrinks. At that debt rate, it will only take 5 years to reach $50 trillion. That is doo-do land.

 Related

The government is changing its inflation formula, again. It takes effect in September, but the propaganda of lower inflation won't hit the news until next year. People will forget the manipulation to present a better picture. Maybe they will stop saying that breakfast is the most important meal? Why, you ask? Because inflation has hit: eggs, OJ, coffee, half-and-half/milk and bread. Breakfast is expensive.

AI Risk Growing

Broadcom (AVGO) is investing $60 billion in Anthropic's AI platform. Of course, they have to borrow that money which lowers their stock price and get this, they only get a first tranche share. This implies how excessive data centers and AI cost. These AI firms are throwing out money like leaves falling from trees. This is an example of excessive leverage. These type of investments ring the sorrows of the financial crisis of 2008. We already told you about Nvidia with its $225 billion in bonds (debt). However, we have other, new, smaller AI firms that are jumping on the bandwagon. They all are using leverage and going deep into debt. Tera Wulf (WULF) has over 3,000% of shareholder equity in debt. Nebius Group (NBIS) over 106% of shareholder equity in debt. Core Weave (CRWV) reported $46 billion of debt in the 2cd. quarter. None of these firms look economically stable.

Power Grid Problem

Instead of using our taxpayer money wisely like helping the power grid, our leaders only live for today's news. Well, the news for tomorrow is bleak according to CEOs in battery storage. They are saying, "We lack transformers, infrastructure and transmission lines to handle all the extra power that we need, especially with stored energy. We cannot move energy in both directions."

Sad, Shout-out...

...the passing of Father Benedict Chao in Hong Kong at 108. The Trappist monk helped all through the horrors of the Japanese occupation in WWII and the horrors of the Communist Chinese after 1949. Open the gates before him. Rest in peace...

Some Positives

Singapore needs hosing. They lack land. Wisely, instead of stripping its small forest land area, they are trying a new approach. They will attempt to make "manmade islands" designed for housing offshore. We hope it works and provides a blueprint for the world. Maybe they could raise investment money from the TNC ( The Nature Conservatory)?

Past Example

The Seychelles is a small group of islands a 1,000 milles off of Africa in the Indian Ocean. The TNC loaned them the money to maintain the natural features of their islands. This was one of the first bonds for nature. They used some of the money to develop tourism for their small population (100,000) and they are doing well. Very smart...Peace. 

Wrong!

- Sometimes you win, sometimes you lose and sometimes the blues get hold of you...

- Carole King, Sweet Seasons

Countdown @ 0...

Our call for a market correction after the Fourth of July holiday is a zip, zero, and maybe because it is so wrong, a negative? A recap not only shows the market rally continuing, but establishing new record highs in the Industrials and S&P 500. The only divergence comes from the Transports. It did rise, but it never came close to testing its last high. This is like an honorable mention for not making an all-star team. We were not alone as many analysts like the Oxford Club declared what we said. The most notable being the Big Short, Michael Burry. We can cry in our beer as the Bulls drink champagne. As for you, our Dear Readers, we find ourselves under restless nights. Our conscious won't let us sleep. This is why we rarely mention individual firms because if we are wrong, we might have caused you financial harm. With that said, this is the scoreboard as of last Friday.

Industrials = Closed at 53,732. This is over 1,000 points higher from our call date. Although the index was down for the week, don't be fooled. During the period it set a new record high with momentum.

S&P 500 = Closed at 7785. This is up over 200 points and along the way, it too, set a new all-time high.

Transports = Closed at 21,792. Around 400 points higher, but never came close to testing its last high.

NASDAQ = Closed at 26,729. This is 1,200 points higher and hanging at its high.

Russell = Closed at 305. The small cap index only rose 10 points and it had extremely low volume. This is like a consolation prize. If the market were to correct, say late September or October, this index would be the first to show a decline. If after the consecutive down days this week, one might think it coud be just the timing? The last word on that would be if the market tested and pierced the March low. With that said, we, at Evolution made the wrong call.

Related

Sometimes President Trump does some good things and sometimes some really stupid things like last week. He stated that he would not allow the Transparency Act of 2021 to be enforced. This act says firms must report all details. By doing this, he allows "zombie firms" to continue to operate and that can hurt a lot of people. The big boys love it like Nvidia which has issued $225 billion in bonds with no transparency. They are hiding the true cost for data centers and AI along with Amazon, Google, Meta and et al. Leverage and its overuse is why banks and firms collapse. Not good...Peace.

Countdown: 2,1...

- An investment in knowledge always pays the best interest.

- Benjamin Franklin

Last Two Weeks

The market's action last week shouts loudly that our call for a correction is wrong. The only consolation is that we have one more week in our outlook. With the Industrials and S&P 500 each claiming a new record high and Nasdaq rising over 1,000 points, it seems all over but the crying. With that said, the market is not in full harmony. According to Dow Theory, all three indexes must be in accord. The Transports were up last Friday, but still down for the week. The only index with subpar volume was the transports. At the moment, the bulls are in control. They do not worry about the over leverage spending on AI and data centers by high tech. They have forgotten the red flags posted by private credit market. They are escaping the summer heat by swimming in their profits and placing bets on the "souless" Polymarket platform. 

Behind the Scene...

...As always the revisions by the BLS are never shouted or even hardly mentioned. They confirm what we saw in making our correction call. Jobs were revised DOWN for April, May, June and July. They even had the audacity to say that unemplyment fell to 4.1%. They present their data like a puzzle. The central piece falls with the lack in their research of hearing people say, "I cannot find a job." What the sentence lacks is this continuation, "Cannot find a job...that pays a living wage."

Related

Our Treasury secretary, Scott Bessent says, "The K-shaped" economy is over." He means lower income levels are regaining footing. We see this as funny since he never mentioned the "K-shape" economy before and like the last Fed Chair, Powell, no idea or lying about "transitory" in reference to inflation. 

In addition...

Facts are being gathered about failing businesses in America. Bankruptcies in major firms (those worth over one billion) are rising to alarming levels. There were 785 such firms in bankruptcy court in 2025. We read where Walgreens and Staple's are closing stores and Wendy's saw its revenue shrink for six consecutive quarters

Lastly,

Keep an eye on the dollar. It fell hard last week and it is under 100. Resistance is at 98, but after that the 96/95 range is possible. Even if it stays range bound at its present level, inflation will pick-up. Gas is up as well as mortgage rates. This is not good for summer trips to a water hole or seeking a home before school starts. Our countdown ends next week. so far, our call is looking poorly...Peace

Countdown: 3, 2...

- A 1,000 point drop, a 1,000 point gain leads to foreboding and foreshadowing.

- Sebastian, Evolution of Democracy

Rocky Road

It maybe hot enough that you think of ice cream. We like Rocky Road, but not in the market. As our countdown nears completion, the market reversed. Last Wednesday, our call for a correction was looking good until Thursday. The market reversed. Is the rally still on? Is our call wrong? This is the picture that the stats gave us.

S&P 500 low was 7316 on heavy volume on Wednesday. It closed up last Friday to 7489. Reversal? Yes and no. Although the index was up for the week and broke above its previous support at 7473, the S&P 500 was down for the month. The volume was good. This is two months in a row of a down trend. Foreboding and foreshadowing...  

Industrials offer a similar picture. On Wednesday, they fell to 51,594. Last Friday, they closed up at 52,485. The volume was strong. However, this index fell for the month. The second straight down month.

The Transports had a down week. Although the volume was light, the price decline was severe. The index fell over 1400 points for the week. It too fell two straight months.

Nasdaq was the most volatile. On Wednesday, it fell to 24,442. It closed on Friday at 25,373. The monthly volume was heavy and like the other two indexes, it fell for the second month in a row.

The small cap, Russell was neutral for the week. It was down for the month, but unlike the other indexes, this index was up in June. However, it was down in May. 

What It Means?

There is no conclusive aspect and the countdown has two more weeks. We sampled some of the market leaders. It gives the same confusing answer. 

Apple: This stock hit a new, all-time high, but failed to hold price. For the month it was up, but it fell hard last week on heavy volume.

Meta: Looks like it is collapsing. It was 740 in February and last Friday it was 556.

Google (Alphabet): It was down for the month and fifty points below its June high.

Microsoft: This tech leader shot higher than a Musk rocket. It was up 83 points for the week on good volume. It was up for the month.

Micron: The chipmaker fell like one of the booster rockets falling off a rocket. It was down for the month with heavy volume.

Sandisk: It continues to fall in price. It fell 221 points for the week with a down month.

Amazon: Bezo makes rockets too. His firm exploded for the month from 235 to 271. Problem. There is a huge gap in price and gaps generally get filled.

Bottom line: A new month and the first week is very important and telling. What is the market foreboding and foreshadowing? We will see says the blind man...Peace.