After falling steadily for 3 years, the iPATH Copper ETN ($JJC) is showing some initial signs of forming a potential long-term bottom.

First, $JJC bounced “where it should”, the 61.8% Fibonacci Retracement of the 2008-2011 rally. When something bounces off perceived support, it is a sign of a controlled, systematic correction that is still in the longer-term hands of the bulls. Secondly, it has clearly broken above the first major resistance hurdle, the well-defined down trendline from the 2011 top. That breakout also coincided with a break above the 50 and 200-Day moving averages (not shown).

Copper has a ways to go to prove this is more than a short-term bounce, but it has done all the right things so far towards a possible bottom that could result in the resumption of its post-2003 bull market.