As gold soars to new heights, the decline of copper reveals a hidden opportunity in the market.
Gold is making new highs, but miners are not (if fact, they initially declined today), so it’s pretty clear what’s really going on here, and I’m explaining this in detail in today’s Gold Trading Alert. In this free article, I’m going to tell you about a different trading opportunity that very few people know about. In fact, most people won’t even notice what they missed after this opportunity is over.
What I’m going to write about may seem extreme, but please keep in mind that it already happened three times in the previous 20 years – and it seems it’s about to happen again. And you can still take advantage of it.
The story begins with the price of copper.
Copper is down. Not that significantly, but what is significant is that this is a clear move lower after copper invalidated its move to new highs. THIS is significant. This is what was likely to happen after the invalidation and it makes it obvious that the invalidation was indeed the major sell signal.
The long-term copper chart shows just how important this is.
Copper most likely just formed its FINAL top in a way that it used to form those final tops in the past – in 2008 and in 2022 (and to smaller extent in 2011). The final move took copper to new heights but was quickly invalidated. This is what started truly massive declines in the past, and this is very likely also now, especially given all the limitations to world trade and, thus, world economic growth.
And while this is very bearish for copper itself, it’s absolutely super-bearish for FCX, which has been exhibiting weakness relative to copper for many months now. Remember, FCX is a major copper and gold producer, and since prices of both have been rallying in recent weeks, FCX’s price should be truly soaring.
To be precise, there was a small exception at the end of the rally, but that too was understandable, as laggards tend to catch up right at the tops as the uninformed investment public is entering the market (buying what’s cheap without understanding that it might be cheap for a good reason).
In just four trading days, FCX plunged from above $43 to below $37. I warned that while the rally was sharp, the decline was likely to be even sharper, as fear is a stronger emotion than greed. That’s exactly what’s been taking place.
And you know what’s the best thing about all this?
This is just the beginning. The decline is big so far, but given copper’s enormous downside potential and FCX’s relative underperformance, FCX’s downside potential is even bigger.
FCX moved below $6 three times after being valued at over $40. We might be looking at the early part of a slide below $6 once again. Of course, this move won’t happen right away, but this IS something that is NOT out of the question in the following months.
The move below the rising red, dashed line was just confirmed. The move above FCX’s 2007 high did NOT materialize this time – we just saw a move back to it, and then FCX fell like stone in water.
The massive slide in FCX is underway, and not making money in it will be something that many will regret.
Truth be told, most investors won’t even know about this opportunity even after it’s gone, but that’s not that important. What’s important is that you know about it today – while the vast majority of the slide is still before us.
I can’t promise any specific rate of return, but in my opinion if there ever was a time to take action in FCX (and mining stocks), it’s right now.
Please keep in mind that all this is happening with barely any major action in the USD Index.
The USDX is once again testing its 61.8% Fibonacci retracement level, and this time this level is holding up very well – despite all the commotion surrounding the possible tariffs and tariff threats. This suggest that wants to move higher from here – and higher USD values have been particularly damaging for copper prices throughout the years.
Remember – tariffs are ultimately likely to strengthen the USD Index, but they are likely to weaken the stock markets, in particular the U.S. stock market. This means that copper (and FCX) have yet another good reason to decline in the following weeks and months.
While the market’s initial reaction to all-things-tariffs was negative in case of both: USD and U.S. stocks, it seems that now – after the initial dust settled – the markets is taking a more realistic view on things. The USD Index is moving higher or pausing, while stocks…
Stocks are declining and quite sharply so.
On a side note, I’ve been talking with Paul Rejczak today and last week, and it turns out that Paul – being a person that’s way too humble – has been successfully testing a trading system for S&P 500 for about two years without telling me about it, as he didn’t want to overpromise its results. The tables with data that he showed me were unprocessed, not ready for posting it in public yet, but the results themselves were nothing short of breathtaking.
Precisely: The end result was over 900 index points of profits between Mar. 31, 2024, and Feb. 16, 2025, which was when the system went short… And it’s been short since that time, which means approximately additional 600 index points of profits – total of 1,500 index points. For comparison, the S&P 500 itself rallied by about 300 points during this time. Not bad, huh?
The best thing is that these are not hypothetical past results based on some current parameter optimization. No – those are live results of a system that had all the parameters set two years ago.
We’ll definitely get back to this shortly (we’ll work on better presentation of the system and its results this week), but I just wanted to tell you great news in advance. Also, this system (as Paul said) will probably work on other markets as well, but some more testing is required.
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Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief