FCX

IMN, Inmet Mining, FCX , Freeport, IVN, Ivanhoe and Copper.

Hamilton

The common thread between these four items is, of course, copper the metal. What I will try to do is come up with an average so to speak as there are a number of conflicting elements here. First IMN, several times in the past we called for a drop to around $47.5 or so long before it was even close. The basis for this was an apparent triangle forming. Here are the then and now charts;

IMN June 2011  IMN oct 2011

Triangles are always either waves 4 or B. Well before we got here I had to conclude that the triangle was probable wrong, but I maintained the target (see previous blogs). The stock dropped nicely to $40, in hindsight the proper target as it represents the pause area on the way up. Of course the $40 level would have been a buy but i was not paying attention. Since then, Oct.4 the stock has bounced an incredible $22.50, well over 50%. This causes overlap for a number of counts that are not shown and leaves us with a simple A-B-C. These can be repeated 3x so this is not necessarily bullish long-term.

I got FCX wrong thinking that it could drop further. It did not. Just like Inmet and the others the stock rebounded from that same pause level;

fcx oct 2011 fcx oct d 2011

Freeport does much the same as Inmet but clearly there definitely is no triangle. This leaves a 1-2-3 and now 4, or a 1-2, 1-2 , 3 , and now 4, or a simple A-B-C. Overlap occurs at $45 for the first two counts. It looks like the stock wants to go to $48 (causing overlap). The rebound looks like an a-b-c but the c wave already has two gaps in it. If this happens the A-B-C interpretation will prevail as the most credible.

Copper, the metal has behaved in a similar fashion except that it was relatively stronger than the stocks,it did not fall as much;

copper oct 2011 Copper oct 28 d 2011

On the left the Oct 4 expectation, proven to be wrong immediately as that day was the low. Overlap will occur at about 3.85 and 4.11 respectively. Copper is up 25% from the lows, obviously lagging the stocks by a wide margin. Here again the count is anything but clear even if all possibilities are still open.

IVN oct 28 2011 ivn oct 28 2011 d

Ivanhoe  has a virtually identical pattern , dropping precisely to the pause level of $13 which I thought of as an extreme. Where it differs is that it has two tops which makes things rather messy. Starting from the February top the patterns are pretty much the same. I am fundamentally bullish on IVN but the rebound from the lows of Oct 4 looks decidedly corrective just like all the other ones. Overlap occurs at first $23 and then $24, but neither excludes a continuation of the bear if this turns out to be an A-B-C X A-B-C Y A-B-C. Therefore stop-loss levels should be used un till this clears up. The stock is already up from $13 to almost $21, more than 50%.

FCX, Freeport.

Hamilton

 

fcx aug 2011

This was the picture for Freeport McMoran on August 8 . In the meantime the employees at the Greenberg operation in Indonesia went on strike and are asking for pay increases in the order of 1000%. My initial target then was $30. We hit that today. Here is the chart;fcx sept 2011

This is not the only EW count that can be put on this stock, but it is quite credible. The $6/7 or so target suggested in August may come across as too extreme or downright ridiculous to some, but I am not making this up! This is well tested pragmatic stuff.

Using the “gap in the middle” concept gets us exactly to that price level. This would imply that we are also in the middle of the 3 of 3. No doubt there are alternative counts that are not quite as dismal (for instance a large A-B-C correction that is almost over), but I would not bet my money on it.

FCX, Freeport MCMoRan

Hamilton

Think copper and a little gold, in Indonesia. A one pony show, the green berg ;fcx aug 2011

I was speaking to an old friend about EW, and he said to me that he had trouble “seeing” the waves. I can see that. There are so many different ways of looking at things and so many different excuses that it can indeed be a very frustrating exercise , particularly the the time element can be notoriously off. It is more an art than a science, but with FCX we have a very clear chart. The B-wave that we have seen in dozens of stocks is very prominent with FCX. It is also now conclusive as, due to the overlap, it is virtually impossible that this will still develop into something else. At a minimum this will drop to $30, but I would expect a lot further.

TCK.B , Teck and FCX , Freeport.

Hamilton

Back in January we recommended this stock be sold when it was trading just under $64. The target then was at least $32 but perhaps a lot lower. Here is the chart, now and then;

TCK.B June 2011 tck 2011 1

Should the stock drop just a little further overlap will occur making it almost a certainty that the leg up from the lows was indeed a B-wave, the lower target of $3 will then become more plausible.

If correct one would expect Freeport to look rather similar, it does,now and then.

FCX june 2011 fcx 2011

See previous blogs. Overlap will occur at $45 or under.