ES was the best representation of the market today, we started with some weakness, saw an early morning positive divergence and as prices went higher in to the afternoon on seasonally light volume, 3C showed a significant negative divergence. My gut feel is this is a set up moving in to the French Auction which will occur while most of us are asleep.
Does this chart look familiar?
A triangle and a breakout? This is the Dow Jones Copper index (JJC) and if you said it looks like FCX, you were right, except it is rolled back one day.
As for today, here's FCX vs. JJC
As for the case I made about FCX being in a head fake breakout and likely a decent short sale candidate, compare it to JJC's performance today, the copper industry as a whole broke down today for a loss of nearly 3%, which means FCX is likely a head fake and the price action today was used for the exact reason 3C suggested, to sell in to strength before a reversal. So all of the sudden, the FCX trade looks a whole lot better.
As for BAC...
BAC did exactly what I said I hoped to see, it filled the gap and then went range bound. Compare to the SPY below.
After filling its gap, the SPY continued higher while BAC did not participate, something that makes me feel okay with have held the position overnight.
As you saw earlier, the NYSE TICK chart stayed very mellow today, there was no inherent strength/solid bias to the TICK hart today, making today a mediocre day at best, but every day is usually a set up for a coming move, my guess is the French Auctions won't go well as OATS leaked higher all day today in anticipation of tomorrow's auction and just wait until the S&P finally chimes in with their downgrades.
In a probably little noticed sign of market weakness, the IWM not only did not lead today, but was the worst performer on the day (S&P-500=+.01% , NASDAQ 100= +.31%, Dow-30=+.17% and the Russell 2000 -.66% on the day).
Speaking of possible/probable head fake moves, here's the daily IWM. Not only should the IWM have led today, it should have shown follow through buying on a breakout, neither happened, a definitive sign of market weakness.
Intraday, the IWM didn't participate in the broad market's slow drift up, but couldn't even close the gap, which leaves open the possibility of a bearish breakaway gap, something we haven't seen much of lately, especially not in the averages.
Both High Yield Corporate Credit and High Yield Credit underperformed the S&P on the day as did the Euro. Commodities tended to outperform on the day, something that helps the FCX trade.
All in all, not the New Year's blast the market is use to seeing in the first week of trade.
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