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There should be a trading co-relation between the stock markets and copper (NYSE: JJC).  But as the chart below shows, the two have diverged after trading together in a co-relationship.  Copper should rise with the stock markets as it is a metal used entirely for industrial end uses.

Since February 1, the exchange traded fund for copper, the JJC, and the exchange traded fund for the Standard & Poor’s 500 Index (NYSE: SPY) have diverged.  In today’s market, all three major exchanges finished higher, but the JJC was down.  That should concern traders about the overall health of the global economy.  In a recent interview in Barron’s, Carl Weinberg, chief economist for High Frequency Economics, claimed that Europe was in a depression and Japan was heading that way.

There were ominous signs in today trading.  The number of declining stocks (3318) was more than the number advancing (2789).  The Standard & Poor’s 500 Index also finished with 54% bearish sentiment leading into the next trading day.

This has certainly been a liquidity induced bull market.  Eventually earnings will have to step in and replace low interest rates as the main driver.  These earnings will have to emanate from output, but with the JJC off, the demand is not there for copper.  That is a troubling sign.