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VIDEOFCX: Flirting With Gap Fill?
Sometimes gaps represent continuation; sometimes they represent exhaustion.
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As the S&P flirts with gap fill from Monday, we’re going to get that answer. Although I don’t expect an immediate reversal from gap fill near 926-ish, stranger things have happened. Rather, I think there's a better-than-average chance that the market will have the shake-out day I talked about yesterday, since those who chase the move will worry they top-ticked it.
Noteworthy is the gap up in Freeport McMoRan (FCX) this week. Is it an exhaustion gap? Looking at the weekly chart shown here gives us another perspective on where the stock has been, and where it is now.
The daily chart and the Square of 9 chart in oil shown in my daily report both suggest it's near/at a turning point; it may also suggest that the commodity re-inflation trade is due for a pullback. (See USO for more data.)
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Of course, that ties in with Mr. Bernake’s testimony that deflationary forces are still of concern -- but what would one expect the head of East Coast distribution for the WD40 used in the printing presses to say?
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