Basic Materials (IYM), Copper (JJC) and Freeport McMoran (FCX) have declined over twice as much as the 500 index, since the July highs. Watching what the weakest sectors do during declines can give you great clues to the bigger picture.
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The majority are most likely aware that the 500 index is back at the top of its trading range, with last nights closing the highest since the 8/9 lows.
The above 3-pack focuses on the hard hit basic materials/copper sector. At this time this macro sensitive area is dealing with strong falling resistance.
The “Power of the Pattern” would suggest to follow a breakout in IYM/FCX/JCC should it happen….yet at this time, resistance remains in place!!!
Agree. Hard to think that if the Shanghai doesn’t break higher, than IYM/JCX/JJC won’t either. EU outcome could change alot of these charts, for better or worse. Stay nimble my friends.
Aaron…Good idea against resistance…would use the IYM/JCX/JJC post as your breakout guide. Watch the weakest area, if it doesn’t breakout, hard to trust a 500 breakout!
cjk…Shanghai is setting on key support (See shanghai support here)
At the end of the day yesterday, I picked up SH, RWM, and EFZ. I am thinking that a close above the resistance line of 1230-1231 would probably signal a move higher.
Do you agree or are there other factors to consider?
Hi Chris – thanks for the great charts. how does the Shanghai fit into this if at all? cjk