[FCX] update

The date of the backlink was July 28th and the model there showed that the chart was at long term support with the warning that if that failed then we would have to expect another swoon.

Well, support could not be held and FCX shares had a major swoon in terms of percentage (which are the only terms that matter when trading), and the shares ended up plummeting to $7.75 on August 26th, just a day before I made my pretrading commodities bottoming call.

Since that bottom, the shares nearly doubled in price to $12.60 before pulling back.  And so now we are at a major decision point which will probably either validate or attack my bottoming call which, to my knowledge, was not called as a bottom by Avi, EWI or anyone in Yahoo finance.  

So, it was "a" bottom but was it "the" bottom?  

I still believe there is a high chance that the answer will be yes.  But there will be hurdles to jump before we can be sure about that.  And the first hurdle will come on Monday.  Before I go any further, FCX is a bellwether for commodities.  It is suffering its ass off and is having to dilute pretty massively.  If fundamentals matter, this should be very bad for the share price, right?  And I don't just mean for a month, I mean for the long term.  Management is clearly acting like commodities will be under pressure for years and I take this as a sign that the bottom is near.  The herd always forgets that its darkest before the dawn.  These guys might be CEOs but they are left to twist in the wind of fickle, herd controlled commodity prices and these guys don't even know that humans are a herding species and I would be money they have never even heard of Elliott waves.

So with that setup, the chart since the bottom is shown below.  This can either be an a-b-c into a 4th wave and has now put in 5 down to close out 1 of 5 OR it can be that the count below is in effect and that the recent pullback was the C wave of an expanded flat (they count 3-3-5).  Expanded flats are often found in wave 2 position because those 5 waves down send everyone out of the shares just as they should be buying.

We will know that this bullish count is incorrect if this goes 1 penny below that unicorn tail on the 18th.  So I have set my alarms for that because if FCX is going down again then it is time to raise cash from my commodity stash and let it have its final swoon so that I can clean up at the bottom.  I mean, with this kind of percentage volatility you can make 10 years worth of returns in 2 weeks if you time it right.  A move above the $12.80 level almost certainly eliminates the move off the bottom as being corrective.

Now, let's say this pops up to green 4 on Monday and then stalls there.  I would begin to worry that wave 3 of 5 is about to unfold.  However, even if that occurs, I would still bet some money that my bottoming call holds because I think FCX would put in a failed 5th. Why now?  Because it would come at the end of a long bear market and if failed 5th is going to show up, that is the most likely place.  Time will tell on that front be we should be looking for it.