Thursday, March 10, 2011

Freeport-McMoran Short Update and Nightly Reads

Freeport-McMoran (FCX) Daily Chart

As I posted here on February 24th - Freeport-McMoran looks weak here.... - FCX has traded down to my first price target around $47. Today looked like an "indecision" day and we could see a couple of days bounce out of Freeport from here. However, copper and gold are both still looking ugly and the downtrend in FCX should resume quickly if the market continues to experience weakness.

If FCX breaks the $47 zone and the 200 day MA at $47.49 the road is clear for another drop of $9-10 dollars per share down to the August 2010 swing high of $37 dollars a share. Good luck, set your stops, and don't let your emotions get in the way of some good trades.

Here are some interesting articles worth a read for this lovely, rainy Thursday night.
  • From Zerohedge: Mike Krieger On Why 2011 is Not 2008 - Why it is Much Worse - And on Dow-Gold Parity:
    "This is not 2008, it is much, much worse and far more dangerous. This will not simply be the collapse of the banking system (although I fully expect that), rather it will be the collapse of the central banking system."
  • From Econ Browser: What will Saudi Arabia do?:
    "If all of Libyan production gets knocked out, we'd need 1.8 mb/d to replace it. If the Saudis weren't able or willing to go above those production levels in 2008 when oil was selling for over $140 a barrel, why would you expect them to do so now with West Texas only at $106?"
  • From Hussman Funds: Quantitative Easing and the Iron Law of Equilibrium:
    "Technically, the Fed is buying Treasury securities and creating currency and bank reserves to pay for them. This would simply be an asset swap were it not for the fact that the U.S. is running a budget deficit of about 10% of GDP, so the Fed's purchases don't even absorb the amount of newly issued Treasury debt."
  • From CNBC: Europe's Debt Crisis May Boil to Surface Friday:
    "Before the Germans will agree to pump in extra cash from their taxpayers, backed by the French, they want each leader to agree to legislation at home that will limit the size of their future national deficits. The Greeks are already refusing point blank. Things may boil to the surface at an extraordinary summit on Friday."
Have a good night. See you tomorrow for a mid-morning market index update.

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