For many key names, as well as in the broad indices, this is where the rubber meets the road. Either we are forming the right side of many bases and inverted head and shoulders to move us higher, or we are breaking down to retest the late May/early June lows…or worse. Therefore, I thought it would be useful to update two key tells for the broad market:–$FCX and the small caps.
$FCX is hanging on by the hair of its chinny-chin, chin. Either it is forming the right shoulder of an inverted head and shoulders bottom, or it is slipping away from the crucial $65/$66 zone. The volume on Monday’s move higher was impressive, but the bulls are going to need to follow that up in short order with more strength, or else this is likely going below $60 again.
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The small caps have held up relatively well throughout this correction, compared to the broad market. The daily chart of their index shows the potential for an inverted head and shoulders. Either way, the line in the sand is pretty clear. Should the right shoulder not materialize, we are likely going back to those early June lows.
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