Commodities Countdown

Lots Of Commodities Lose Support - Webinar Skim 2016-09-01

The charts have been bullishly aligning for the majority of the commodities since the January/February lows. With the US Dollar trading between 93 and 100 for 19 months, the stability of the dollar has been helping some of the commodities regain some chart strength. With the $USD in the middle of the range, 8 commodities either lost the support of the 40 WMA or broke a support trendline in the last 2 weeks. That is not the action we would expect to see.

Gasoline ($GASO) lost 40 WMA support in the energy sector. Crude Oil ($WTIC and $HOIL) are still holding up above the 40 WMA...barely. Heating Oil ($HOIL) gave us a trend line backtest that looked successful but now looks unable to get back above trend. So these two start the parade.

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Agrium (AGU) And Potash (POT) Discuss Merging

Two of Canada's largest companies in the Agriculture related space confirmed they were in merger discussions on Tuesday. While Agrium (AGU, AGU.TO) is widely considered an acquisitive company, this has not been the history for Potash Corp. (POT, POT.TO).

A few things need to be reviewed here. First of all, Potash prices have been struggling since the collapse of the potash marketing consortium, Canpotex. As this Potash pricing problem doesn't appear to be resolving itself anytime soon, Potash is struggling. It appears that Agrium wants to continue to expand its vertical integration model for supplying the farmer. With a retail arm firmly in place, Agrium does a nice business supplying the farmer with crop inputs and then helps them with the sale of the grain during and after the harvest through their network of grain terminals. 

Let's look at the charts to see what might be happening technically. Starting with Potash Corp, the stock is roughly  half of its preceding market value before the breakup of Canpotex. Again, Canpotex was the marketing consortium controlling price on Potash. Before Tuesday's announcement, Potash's US listing was trading at $16 USD which is  about 25% of the 2008 high of $65. That can motivate a management team to look for strategic alternatives.

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Oil Pauses, Natural Gas Pops, Gold Slides - Webinar Skim 2016-08-25

The commodity pops and drops this week have been very sudden both ways.

Oil struggled as it approached $50 and has drifted back this week. This is not really a surprise, as probably every floor trader was selling at resistance. It has now built a nice channel between $39 and $50. If crude breaks through over the next few weeks, expect it to accelerate quickly.

I started off with a review of the webinar I shared with Martin Pring on Tuesday, August 23rd. Members can find that previous webinar at the StockCharts webinar archives. There were a few questions from the survey results that I tried to answer in the review portion of my Commodities Countdown webinar.

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Martin Pring and Greg Schnell - Back From The Precipice - Webinar August 23

Martin Pring and Greg Schnell are getting together in Pring Studios in Florida to do a live debate webinar. The setup is compelling as many of the major charts in the world are lining up for a major shift. I've nicknamed the webinar 'Back From The Precipice' as the charts appear to be setting up for a major trend change.

Click here to Register for Back From The Precipice with Martin And Greg.

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Oil Makes Strides Towards $50 - Webinar Skim 2016-08-18

Well, that was fast! Oil makes strides towards $50 so the bear market in oil from 12 days ago is officially over. A business news channel announced a new bull market in oil because it is up 20% off the lows. Best to ignore hype reporting that leads us into and out of trades. This same news network had everyone bearish 2 days before oil bottomed by talking about the new bear market in oil starting August 1. Maybe we'll just use the $WTIC charts and look for support and resistance levels!

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Will Crude Oil ($WTIC) Break Out To New 2016 Highs?

We have had a wild ride with crude oil so far this year. From the depths of $26 to over $51. Recently, the pullback totalled 20% from the June highs. It took roughly 2 months to pull back and now oil has been rising almost every day, heading back to $50. We can also see that the pullback was about 50% of the move up. I also made a note on the chart about a TV panelist yelling about the new bear market in crude oil. While they were almost screaming to remind people to get out, it could not have been a more contrarian call. 

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Ever Been Hit With A Gold Brick?

Investing in Gold miners (GDX) has been a big winner this year. So far 150% in a non-leveraged ETF. But it is always good to keep evaluating the trend. We can look at the pluses and minuses on the Gold trade currently. Let us roll through the different charts.

First of all, on GDX, the SCTR has been glued to the top. We can see it looks exceptional. In the next pane is the relative strength compared to the $SPX. The trend is still up, but recently the GDX and the $SPX have been moving sideways for a month as the early July and Early August peaks are at the same levels. 

The price panel shows a defined uptrend that made a higher high this morning and closed back in the range. The MACD is going to break either trend line shortly. For the volume, I want to zoom in on the last 6 months.

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Commodities Sit On A Barbed-Wire Fence - Webinar Skim 20160804

My webinar this week spent some time on Commodity-Country-Currencies. The underlying theme for the webinar was the long term chart of the $CRB and the importance of breaking out of a range that I would define as the deflationary range. The red line shows support for 40 years. 

In the depths of the commodity drop into January, the market continued to fall below this historic support level into an area I would define as deflationary. Is this trend changing for the long term? Looking at the Percentage Price Oscillator (PPO) below, this is an extreme percentage drop. Now it has crossed the signal line and is turning back up. But the real important area of the chart, the red line, continues to be a hurdle. In the zoom panel, we can see July closed back below the red line. The month of August will be very important. Closing back below the red line for a second consecutive month would suggest bigger problems in Commodityville as the long-term trend seems broken. On the chart, we can see the 10 Month MA in green is trying to support the index. So far we have 4 consecutive months of closes above the 10 Month MA. While commodities may ebb and flow, the real question is: What do we need to see to be long term bullish on Commodities?

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