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Well, This chart went vertical, and the commodities went south.

Enough said. As fear returns to foreign markets and money migrates to the US Dollar denominated indexes, we can continue to expect weakness. Caution for Canadian stock picking is still advised. This is currently driving the trading. You could say the Euro collapse is, but the reality is that the US Dollar denominated commodities go down as the dollar rises. Copper continues to move down.

Good Trading,

Greg Schnell, CMT

This chart represents the shipping of dry goods. 6 year chart.

Many people disregard this indicator as the ships ordered in 2007 bull market have been delivered over the past few years creating too large a fleet for demand. That said, the $BDI rallied off the October low. To see it roll over at the former support resistance line (red line) is BAD! Flat out Bad! This commodity space indicator is not healthy and the recent bounce was off the 2009 lows. Iceberg dead ahead? Keep watching $copper. Copper is making lower lows most weeks. 

If you want to gain some real knowledge on trading commodities, investigate the outstanding conference the CSTA is holding in Banff, Canada. www.csta.org

Good Trading,

Greg Schnell, CMT

Either all the world is insane together as this MACD says the yield momentum is improving. (the mass physcology  of crowds) Or somehow Europe prints money and the world is just fine. Who knows...but this will be a great clue. The long bond yield could be making a final low with a much higher MACD which would be a very bullish signal to buy something like TBT. While this trade has not set up yet, it definitely needs to be monitored full time. See the $COMPQ for OCT 4, 2011 MACD as an example.
Notice how high the MACD is currently, even though the price is almost the same as the previous low. This positive divergence shows very little incentive to expect this long bond (short yield) trade to continue to work. If this can make a higher histogram on the weekly chart, I would be looking to buy TBT or Short TLT. The reason this trade is so hard is that we see so many forecasts of a global recession, so how could this be the time to short the long bond price and go long a rising yield? Well, it might have something to do with operation twist ending and the US economy still ok enough that QE is not required. I won't debate if the Fed will start more QE, but all that to say, keep watching this chart for a higher Histogram. It might be an interesting place to put a trade on with a beautiful close stop if you are wrong.

Good Trading,

Greg Schnell, CMT

Recently, I blogged about how the wheat futures had already broken down, but the current spot price was still above support but looked to go lower. Well, look at the volatile response wheat has had recently.

The spot price has broken down out of the six month range, popped back into, then right out of the top of the range all within a few weeks! So it has broken the six month range on both sides in a few weeks. Talk about wild volatility! 

In general, wheat has moved opposite the $USD. Makes sense as that is what most commodities have done. Interestingly, in the last few weeks, they both have surged higher together which is very interesting. 

We'll keep watching, but maybe this will show up in trend changes for some of the Agriculture commodity stocks.

Good Trading,

Greg Schnell, CMT

Crude is what makes the world go around!

Living in the heart of oilville (thats not olive oil!) we pay particular attention to crude. Currently crude trades below Alberta government budget forecasts as well as industry budget numbers. I believe Cenovus used $104.

Crude spiked into the high $80's last week and sent the planners back to the budget drawing board. Oil budgeting is never easy. 

Today I want to walk through a series of charts that lay out $WTIC price movements since we hit our highs in 2008. Its a fascinating walk through fibonacci levels. I have previously discussed how crude trades off fib levels but this current discussion is a great overview for ensuring you are trading with the trend.

Currently, the bears are in full control...or was that soooo last week?

Well, $NATGAS appears to be building a bottom. Currently we are testing resistance. 

GOLD is this finally the bottom?

Probably every Technician on the planet expected a bounce here in Gold. This is a significant reversal candle.

So lets lay out the issues. Gold's ability to go up while the $USD drops is not common. All the other commodities continued to give way today. Some will say as the US approaches Fed Easing, Gold will soar. Commodities in a down draft, and the US Dollar Roars HIGHER! Those are significant headwinds as people move to cash. The Red line at 157 on this chart will be a significant point of resistance. But perhaps this is the low. At least you have a place to set your stop against. If the lows we put in yesterday are used as a line in the sand, we can trade against that.

Good Trading,

Greg Schnell, CMT

One of the things the world keeps talking about is food inflation. Well, wheat futures are breaking to new lows. The chart below is the current month contract for $WHEAT. However, the futures curves all look weak and are getting weaker. 

While everything feels fragile at the moment, we need to be building our shopping list.

Today lets talk about  Teck.

Check this out! I have been looking for a quick view of the $TSX from stockcharts home page for a while.

Look what has made it onto the consistently popular list. $TSX....

Nice button for Canadians! 

Good Trading,

Greg Schnell, CMT

PS. It would appear when oil couldn't hold its breakout this week, we are in for more pain. $Copper continues to falter here. I'm staying cautious.