It Can’t be That Simple, Can It?

Since the inception of the “chessNwine” tab here on iBankCoin, I have relentlessly looked to Freeport-McMoRan Copper & Gold, Inc. as the one individual stock that matters the most in terms of broad market directional tells. Indeed, looking at its performance over the past several years, the well-run copper giant has been a steady leading indicator for the S&P 500. In early 2011, FCX clearly formed an intermediate-term top and proceeded to roll over nearly two months before the S&P followed suit for the latter’s 7% correction. To be sure, the correct strategy was to respect Freeport’s weakness during the winter months by at least becoming increasingly defensive as the S&P diverged and wedged towards 52-week highs.

In a similar vein, ever since FCX bottomed and then broke out last month, the stock has basically given the all-clear signal to “Freeport Watchers,” rendering each ever-so-slight dip in the market to be a solid buy. Even with today’s broad market weakness, Freeport is far from giving any kind of sell signal, as price has negotiated all moving average nicely and looks poised to continue higher. Also note the absence of any serious selling volume since it bottomed out last month.

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