The copper market has been in a bearish trend for the past year and a half, with prices falling from $4.60 a pound to as low as $3.00 a pound last October. There are signs that a bottom may be near.

As the price has declined, large speculators have moved from a large bullish position to the largest net bearish position since July 2009.

This could be a good bullish sign for copper, as the price has stabilized even as large speculators have continued to build their bearish positions.

Anytime you see a price stabilizing as the bearish sentiment continues to build, it is usually a sign that a bottom is near.

Copper prices have been range-bound for the last six weeks, with the $3.50 mark acting as the high and the $3.25 acting as the low.

The bearish sentiment has been fueled by demand concerns as the recession in Europe and a slowing Chinese economy have investors worried.

Friday’s news that eurozone officials had hashed out a plan to allow Spanish banks to access bailout funds without the government taking on more debt sent commodities soaring. Copper rallied along with the other commodities, but it didn’t even break above that $3.50 level.

If China’s economy starts improving and Europe stabilizes, copper could rally a good 30% over the next 12 months.