Archive for October 12th, 2009

  • Physical Commodities are on the move

    Crude oil has moved back above the $73.00 level and natural gas has now retouched the $5.00 level. By itself this move is not significant, but there are other commodities which are also reaching upper price levels that suggests that a bull market may be ahead.

     Soybeans has blasted off from its lows like a roman candle and the corn and wheat markets have also enjoyed a very strong rally recently. All of these markets should be watched very closely over the next few weeks. If they all hold near current price levels in the days ahead, this will be a sign that buyers are stepping in and willing to support every minor price decline or correction. Small corrections after a significant price rise is a sign of a change in momentum. If strong buyers are followed by weak sellers, this is a set up for an additional rally. This is what we have in the grain markets and the energy markets. We have had a nice rally recently. Now let us see if aggressive sellers are absent in the next decline.

    Why do I suggest that traders watch the physical commodities? Baker Hughes (BHI) just set a new high for 2009. So did Schlumberger (SLB). These bull markets are beginning to catch investor attention. If the energy markets find a base, this will help these two stocks.

    Want an ETF to watch over the next few weeks? Watch DBA. Power Shares Agricultural. If the grains continue to establish a bullish scenario in the futures markets, this will help this ETF find a new bullish footing. A close below $25.00 in DBA cancels this view, but watch this ETF over time. If you see the next down move is greatly diminished and has the appearance of lack of selling interest, this will set up the potential for a bullish price run later in the month. I will watch this for the Shufflers and keep you up to date on the progress.

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    2009.10.12 / no responses / Category: TCC, The Stock Market