This morning, many of the leading base and industrial metal stocks are retreating lower. This important sector has surged higher recently as the central banks around the world continue to try and inflate stocks markets with more easy money policies. Last night, the important and highly followed Shanghai Index (China) plunged lower by more than 2.0 percent. Growth in China continues to slowdown and this is not a positive for the leading base and industrial metal stocks.
Leading base and industrial metal stocks such as Freeport-McMoRan Copper & Gold Inc (NYSE:FCX), Southern Copper Corp (NYSE:SCCO), BHP Billiton Limited (ADR) (NYSE:BHP), and Cliffs Natural Resources Inc (NYSE:CLF) are all trading lower on the session. All of these stocks are also very overbought and extended on the daily charts. This tells us that pullbacks are very likely in the near term.