Wednesday, September 23, 2009

Wednesday Commodities Round-Up

I'm going to start using ETFs for this analysis. The reason is simple: they're publicly traded allowing more people to access the market.

Click for a larger image

DBA is an ETF that is comprised of corn, sugar, soy beans and wheat. Since the end of last year there has been a slight upward bias to the chart with a trend line labeled A above. Prices have moved above this line on several occasions only to return to the trend line. Prices have consolidated in two areas labeled B and C. Note the consolidation is still above the trend line. Finally, note that while it loos as though there is a possible head and shoulders formation, the formation is occurring at the low end of the pattern meaning this is not a reversal formation.

Notice that prices have struggled to get above the 200 day EMA, indicating this ETF is still in a technical bear market. Also note that all the EMAs are currently trending lower and the shorter EMAs are below the longer EMAs. This tells us the overall trend is still negative. However, also note that prices are in a general rising trend that will-- should it continue -- bring prices into a bull market.