You Cannot Make an Easy Market if it is Not There

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A reader of mine (zzzdoc) correctly points out that one of my key broad market “tells,” Freeport-McMoRan Copper and Gold, has been quite weak of late. Indeed, the weekly chart above shows us that we saw a nice bull flag breakout a few weeks ago, only to stall and make what appears to be a lower swing high. At issue now is whether this $52 level can hold as support. If not, a test of the 50 period weekly moving average down around $45/$46 cannot be ruled out. If that sounds as though it could go either way, it is because in this type of market it most certainly can. Despite the fact that I agree with steadfast bulls that we remain in a cyclical bull run and have not yet formed a multi-year top, Mr. Market often forces you to endure wishy-washy price action for extended periods of time.

To be more precise, my analysis of the Freeport chart above tells me that we can continue to expect a stock picker’s market going forward. If you are looking to dump all of your money into the market and pound your chest about how correct you were to be a bull, full-invested across all sectors, you are a few quarters too late to the party.