If you agree with my thinking that FCX has been an excellent leading broad market indicator over the past few years, then you are placing significance on the premier copper (and some gold) miner’s positive (K) divergence to the broad market here. As you can see on Freeport’s daily chart below, while the broad market makes new lows during this correction, FCX is not only holding above the key $46 level, but it is also firming up in terms of tight price action, which is constructive. With this positive divergence in mind, and assuming it persists, any further weakness in the broad market is likely to be much more of a buy than a sell, in spite of (or perhaps because) how hopeless the bulls feel today.
In the past, Freeport has bottomed (or topped out) several weeks before the market has. In this case, Freeport tested $46 and formed a double-bottom in mid-May, and has held above it ever since.
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FCX will get slaughtered…I think your reading too much into this slight divergence.. jmo.
Why do you think that?
I think we are entering in a bear market and most people are in the denial phase. I’m not surprised FCX is holding decently as gold and copper have held up but now copper looks to breaking down from a bear flag.We’ll see. Your analysis could very well prove to be right though Chess.
If we are going into a bear then FCX will get slaughtered, so I agree with you on that point. I just don’t think the cyclical bull is over yet.
Good post Chess, have been watching FCX with some interest over the last few sessions. Imho, SPY seems to be trying to form a base of sorts, what shape/pattern that takes remains to be seen. A good sign in that regard would be if today’s gap down is covered and yesterday’s high taken out in a day or two. There is positive divergence developing between price and several indicators on the smaller time frames., Patrick mentioned the beginning of a bear mkt; if the indices took out the March low I would be tempted to think along similar lines as well. Till then or till we get a bullish basing pattern in place, I’m holding onto most of my trading cash.
Another indicator is the number of bears replying to the Fly’s bullish posts. When that number increases noticeably, its always a good sign. 🙂
ha good points