The FCX stock and PMs declined yesterday, further proving our profitable predictions.
Shortly after I posted my analysis yesterday, the market action provided a nice follow-up. PMs and FCX declined – profitably so.
Yesterday, I wrote that since the decline in the FCX has been taking place on strong volume, it looked like that decline had legs”. So consequently, it was likely to continue. And that’s what we just saw.
Freeport-McMoRan declined by over 1% yesterday, and our profits in it increased once again.
As I indicated yesterday, the above is connected with the decline in the stock market.
Stocks declined a bit yesterday, and the FCX magnified that move.
The most important thing here, though, is that the decline in stocks is very likely in its early stage. Very early, I should add.
What we see being formed right now is likely the right shoulder of a bearish head-and-shoulders pattern, which – when completed – will likely to trigger additional declines. The formation-based target is at about 3,500, which corresponds to the 2022 lows.
And yes, FCX is likely to fall significantly, given the above. So do junior mining stocks.
Right now, juniors are declining very much in tune with how they declined in mid-2022 – I copied the previous declines and pasted them to the current situation (marked with yellow, dashed lines).
The move back below the previous 2023 highs and the $40 level both indicate that lower GDXJ values are just around the corner.
Yesterday, I wrote that gold’s move above $2,000 was unlikely to hold.
Indeed, it didn’t hold for even a single day; gold closed below that level yesterday.
The most interesting – and important – thing is not visible from the day-to-day perspective, but when you look at the slightly bigger picture.
Namely, gold is currently quite visibly below its recent highs.
Conversely, the USD Index just moved very close to its recent lows.
Consequently, it’s obvious that gold is generally ignoring bullish indications from the USD Index (to a considerable extent) while following the bearish lead.
This is yet another (along with miners’ weakness relative to gold) indication that the precious metals sector wants to move lower now.
All in all, the outlook for the precious metals market is very bearish, and the profitable action in the FCX indicates what’s likely ahead also for the PMs.
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Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief