On Friday I wrote a post mentioning how I would welcome several days of boring, sideways action in order to better set up a multitude of charts that remain loose and sloppy. With copper and Freeport McMoRan tanking this morning, outpacing even the broad market sell-off to the downside, the sideways scenario is obviously not in the cards to start the week.
The bulls are looking for the now-rising 20 day moving average on the S&P 500 to act as support, currently inclining from 1183. Moreover, they can also point to some large cap tech and retail/consumer discretionary names like AAPL CMG DECK LULU as doing an excellent job of significantly outperforming the broad market thus far today.
To my eye, the big story is copper here. The issue is whether copper is finally rolling over after showing relative strength at various points throughout the summer, or alternatively if it is leading equities on a fresh leg lower. I have often used copper as a leading indicator for equities over the past few years, but these past few months has forced me to reevaluate that thesis. Either way, the overall action is nasty and not consistent with a boring, sideways market digesting last week’s gains in a benign manner. Whether this is a one-day phenomenon or the beginning of a big move lower may very well be conveyed by how we close today.Twitter