Wednesday, April 1, 2009

Wednesday Commodities Round-Up

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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.