(Click on image above to enlarge it.)
This is a weekly chart of Copper. Note the NMC Cross Kiss Zero Hit that developed on the week ending 8/22/08 (shown via a red arrow). After a delay bar, an entry was triggered at a price level of roughly 335.00.
Also note that at the time of the Zero Hit, prices had crossed below both the Fast and Regular Ocean natural moving averages (green and red averages on prices and shown via a red arrow) and rallied back to the new resistance that they were then providing. When a Zero Hit (especially a Cross Kiss Zero Hit) forms while prices are catching the resistance of the moving averages, it helps qualify the integrity of the setup signal.
Additionally, the BTX had risen above the trend threshold of 35, and the BTX 2-Line had experienced a change of dominance with the red line crossing above the green line as the market turned bearish. In the 8 weeks that the short trade has been operative, Copper has declined more than 45%, about $38,000 per contract, in one of the world's most important industrial metals.
As we know, a weekly setup (especially a Cross Kiss setup) is very powerful. This setup and short entry has now completely erased 3 years of bullish price action. Let's now take a look at a Copper Daily chart to see what messages it might have been generating as the weekly setup formed:
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