Copper (comex HG) A study: 3 peaks and a Domed house?

The book by Ed Carlson titled " George Lindsey and the art of Technical analysis" has been one of 'the' technical analysis books of the year and i suspect has sold very well. Fascinating to read and George Lindsey is (was) somewhat scary in appearance after facial surgery and hair toupees and a complex personal life ( reminding me of a perculiar uncle I had !) but as they say ...there is a thin line between genius and insanity, not for one moment that i am suggesting he was a few straws short of a bale but he was...er... unorthadox ( lets leave it at that). I read it this summer and got my head round some great ideas including his theory on time intervals, counts and its application to history which has some profound and startling results yet in many ways once grasped made total common sense. The 'Three Peaks and a Domed House' chart pattern is complex and however when i put it down i thought to myself....'Well that's one chart pattern I will never see as you would not have a bats chance in hell of spotting it' and so I put it to the back of my mind. Not only is this pattern long and complicated with several patterns within a pattern but there are more than one schematic versions of it knocking around on the web and that's without including the one in Ed Carlson's book on Lindsey.

These two diagrams may look the same to you but there are crucial differences to me but this allowed me a certain flexibility.
Fast forward a few months to this morning when i spent an hour or two looking at Comex Copper (HG) on the Esignal charting platform. I had a completely clean chart with no forks/reaction lines/pivot counts/Fib levels or indeed any indicators. Copper is a market I follow closely( daily) and is an industrial metal extrememly sensitive to economic fundamentals. Here is my 3P&DH wave count on the weekly Copper chart (candlestick & line).
I often thought that Lindsey missed out by not calling it the " Three Peaks and a Doomed House" because price is 'doomed' once it tips off the 2nd RH shoulder!!


Enough bad jokes from me as this still leaves me with a need to find a view on the future of Copper. It matters not if the above Copper charts are displaying the classic 3P&DH components. There are definitely 3 peaks. Then the basement then the first floor and then a head ( double head) and shoulders or Cupola. However pivot # 4 and also pivots #10-14 worry me a bit, but the 15-20 AKA "the first floor" works well as does the rest of the pattern. Infact if you look carefully you will see other possible smaller 3P&DH patterns within this larger pattern shown here on the weekly chart.
So What! I hear you say and i agree. The important issue is where we are going now. According to Carlsons book on Lindsey i quote:
"An abrupt decline then follows that right shoulder( of the top H&S). This larger decline from the right shoulder(25) of the cupola precedes another short recovery(26-27). The top of this second recovery often ends at a level, relative to the 'First Story' roof".....
he then continues
"After this second lower right shoulder is completed the average drops back to the ultimate low of the base where the domed house began"
Well, I can't see HG Copper falling back to 125.00 but I can envisage taking out the 'First Floor' or the 15-20 set of pivots which have support at 275.00 and remember what makes this such a powerful pattern is that " The knowledge that the entire gain of the previous 2+ years will be wiped out"



Now back to more familiar territory for me.....The structure offered on my chart by long term reaction and median lines. The chart below was accurate enough to define the top of the market this summer ahead of time and was posted as such by me at the time,

And what do the indicators on the daily show? Long term stoch (2x) and B#Line long term are tipping down but for the sort of move we are talking about there is no 'waterfall'/ ' water over the edge' sign...yet!

I suspect 2012 is going to be a horror! with sovereign defaults, stagnant growth/ recession,and mayhem in credit markets and banks going bust as the Euro zone unravels politically and monetarily but wow! Copper back at 125? Perhaps I am not that confident, More likely A .618fib RT of the 2009-2011 move up would see us at 250.00 but one thing is for sure for the moment. There is a very high probability of a restest of 300 and then a break below. Thats nearly 30 cents below todays price and if Gold plays out as i anticipate with at least a few more hundred bucks on the downside then it may just be possible to see a sell off in Copper the likes we have never seen before. Until that day comes i am looking for a short position in HG Copper with a test of 300.00 as the partial objective. Stops will be above 333.00 but I will post any entry and method.