My once-reliable Freeport-McMoRan broad market “tell” has been running a few misdirection plays at me of late. While the broad market has been printing fresh 52 week highs on a daily basis, Freeport has been churning below its 20 and 50 day moving averages, with a close below the 100 day moving average to finish out last week to boot. Beyond that, the large cap copper and gold miner appears to be nearing the apex of a descending triangle, which often resolves lower. Thus, I am inclined to believe that this week will resolve this glaring divergence, one way or the other.
You may recall a few weeks ago that the transportation stocks were diverging from the broad market as well, only to quickly recover and help to propel the S&P even higher. Just as with the trannies, Freeport has been an historically sound broad market leading indicator. Accordingly, I do not expect the divergences to remain in place for much longer.