GOOG And FCX

This is the chart of GOOG as of Wednesday's close, prior to it being called Gap Up at yesterday's open, to 536.00, which was Gap support that The Bears broke in Wednesday's session.

"Broken support 'should be' resistance on any retest," so that opening indication at 536.00 looked marked for a Gap And Crap opening, especially since The Bears had smacked GOOG back out of the Channel in the daily chart after "Ye Olde Knuckle-biter" on Tuesday. However, two factors kept me from shorting the Gap Up opening in GOOG:

(1) In the middle of the chart, 527.87 was the pivot high of a "W"-Bottom, or Double Bottom (synonymous), the upside takeout of which took GOOG up to 547.00. At Wednesday's low of 527.70, "former resistance at 527.87 became support." The Bulls stood their ground and closed GOOG slightly above it.

(2) Not only had The Bulls stood their ground at expected support, they were breaking out of a Channel (the white arrow) at the open, so it 'could be' a Gap And Go opening.

Since the daily chart usually trumps the intraday chart, the case for The Bears looked stronger since they had smacked GOOG out of the Channel, so they had to be favored to defend 536.00, but I had some doubts.

Hmm-m-m...what to do...what to do...

I decided "when in doubt...stay out." I passed on shorting the Gap Up opening.



RESULT: It was a Gap and Crap opening (red arrow). Curses! LOL.



But, The Bulls still might not be finished. Beginning at the September 20 high of 558.52 (Blue #4), that data point also is Black #1 for a "possible" Symmetrical Triangle. The top of it comes in today, September 30, at 540.138. If The Bulls can break out of it, though, they've got to deal with the bottom of the broken Channel, which comes in today just above there, at 540.85, so an upside Symmetrical Triangle breakout wouldn't look quite believable, but we know how deceptive Ms. Market can be ;)

The Bears need to take out Black trendline #2-#4 and get moving on the downside, or The Bulls could turn it around. That trendline comes in today at 521.463.




At yesterday's 30.64 low, the 2011 Falling Wedge target of 30.61 that went IN PLAY on the August 5 breakdown below 46.00 got MADE, within three pennies.

That doesn't mean that FCX can't or won't go lower. It only tells us that the downside expectation from that particular pattern breakdown has been achieved.

Market lesson: "When analysts are calling for higher targets, but we see a chart breakdown, be ver-ry careful, despite low price earnings ratios and despite how cheap the stock looks. Cheap can get a lot cheaper."