Let us cut right to the chase. No one can deny that the market has been correcting for the past five weeks or so. The real issue is whether we will stabilize and settle into some kind of broad trading range (2004) or whether we are on the cusp of a major breakdown (2008).
From my vantage point, at the heart of the answer is whether we will see another round of steep deflation, or instead whether reflation will continue. Seeing as I am skeptical of manipulated government data as well as dorky, lagging indicator economists, I would rather trust the way the market negotiates one stock in particular.
Freeport-McMoRan Copper & Gold Inc. (Public, NYSE:$FCX), is a prominent, large capitalization copper miner, as well as dealing with gold and molybdenum. They are a fairly well run firm. Looking at the chart of the stock in multiple time frames, it has become apparent to me just how good of a tell–and leading indicator–the stock has been with respect to the broad market. If we are going to have another deflationary crash, or instead will reflate (or inflate), this stock will tell us in advance, given its mining interests.
Thus, with the uncertainty and choppiness of the current market environment, I will keep $FCX on my screen, irrespective of whether I ever trade it. As I am writing this, the stock is sitting on a significant support level. To break down through it would be a very bearish signal.