Jim Letourneau's Blog

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Dodge City

I've mentioned Phelps Dodge(PD) recently as there was some strong price movement. Volume did not accompany the move and now Phelps Dodge is pulling back.

Jim Cramer's recent TheStreet.com article, Things Can Go Right, Just Not Cyclicals is bearish on Phelps Dodge.

The raging bulls of the commodity world are continually using the phrase "China Demand" to justify higher commodity price forecasts. In the case of copper, AME Research forecasts that China's 2008 share of global copper consumption will be 22.8% vs. 13.4% for the United States. As the Chinese economy transitions from being a low cost supplier of goods to the world to a major consuming nation what happens in the United States will become less important. That shift could be 5-10 years away but I believe power will shift from the United States to China over the next decade. It probably won't be a smooth transition.

As a speculator, rather than take a strong position, I have the option to stand aside and wait and see what happens. If Phelps Dodge starts moving upwards on high volume I'll pay attention. If it moves below its most recent technical levels I'd consider selling.

Not Advice
Courtesy the Big Picture Speculator
I currently do not own PD