Notice the following on the industrial metals charts
-- The MACD is rising and has given a buy signal
-- The RSI is rising
-- Prices have been in a downward sloping consolidation pattern since the end of 2007
-- Prices and the SMAs are in a tight range, indicating indecision
Notice the following on the agricultural price chart:
-- the MACD is rising and has given a buy signal
-- The RSI is rising
-- Prices are in a triangle consolidation pattern that started at the end of last year
-- Prices and the SMAs are in a tight trading range
Bottom line: commodities have clearly broken their price spike from last year and are currently consolidating the sell-off. However, prices have not dropped farther, indicating we are probably developing a price floor. From a fundamental perspective, it's important to remember we're still in the middle of a recession which is depressing overall demand.
