Copper is the building block of every major economy. It's an essential component to cars, houses and buildings. It's a very sensitive metal. When economic growth speeds up, people start hoarding copper because the price can go ballistic vs other items like lumber, steel and chemicals. China has been the growth driver in the world economy for awhile now and they started buying copper with impunity. Some believe they over bought and have up to a 10 year supply of it. It's understood that they own about 50% of the available copper in the world. Now that their economy has slowed, since they are such a big buyer of copper, the demand goes to zero really fast. I doubt they will sell any of their copper supply but if they stop buying the metal and the US stops buying it, then it's going to fall like a rock.
Copper reacts much faster to the economy then something like the S&P 500 which moves like a snail. So if you want to make a more aggressive bet on economic growth or contraction, copper is a much better product. It's also a great tell to confirm price action. In years past, people use to use the Dow transports as a confirming signal to the Dow. I think more and more people are now using copper to confirm strength or weakness in the market.
Copper peaked at 4.65 back in early February where the S&P 500 peaked in late April. The sharp rally we had in the ES in July was NOT confirmed with copper and was a great warning signal.
If you want to know how low copper can go, in the 1970's it traded between .50 and 1.00 per tonne.
