_________________________
The U.S. stock market indices have started off 2012 without much sensitivity to the cratering Euro. Thus, there is a legitimate case to be made that we are witnessing a loosening of tight global asset correlations. However, one holiday-shortened trading week does not a major trend make.
Apart from the Euro Zone, turning to the global growth story you can see on the weekly chart above of copper mining giant Freeport McMoRan that the stock attempted to break out from a multi-month symmetrical triangle. Volume was not impressive, though, and the stock closed well off its highs of the week, calling into question the validity of the breakout. Moreover, over in China the Shanghai Composite Index is still below the key multi-year 2,300 level, as China bulls have yet to show any sign of strength. Other emerging markets such as Brazil, India, and Russia have also turned in lackluster performances in recent weeks and months.
U.S. bulls argue that they do not need the Euro to bottom, nor strong emerging markets and the return of the global growth story (I use copper via FCX as a generally reliable “tell”) in order for stocks traded in America to rally. For the first week of 2012 they have, indeed, been proven correct. If this dynamic continues in the coming weeks, it will be the traders who are most nimble and open-minded that can capitalize on the changing landscape and opportunities that present themselves.
_________________________
_________________________
FCX correlated with spx in general, right? what about JJC instead?
Yes. Similar analysis as above, to my eye with JJC.