I mentioned in Friday’s Video about the small Head and Shoulder’s pattern forming on the SPY and gave some possible targets. We broke that neckline at the open today but had a nice reversal and ended the day on the highs so we’re still eyeing these levels until we get a break either way. Seems bullish near term with the almost bullish engulfing candle but I just can’t get long on this. We may get a small pop up off of today’s action but when you compare FCX to the SPY chart you’ll easily notice that FCX is still under performing the market which is a bearish sign.
FCX is one of the largest copper producers, which is seen by many as a proxy for industrial demand. FCX continues to make lower lows which in my opinion will drag the SPY with it. FCX was down 1.64% today which is not good if it is indeed a market leader.
I’m not entering any new shorts right now but will be watching some Fibonacci retracement levels for a possible short entry this week. The important thing right now is maintain a lot of cash and if you’re going to trade, take small positions until we break out of the SPY range we’ve been in the past few weeks.