Wednesday, March 18, 2009

Wednesday Commodities Round-Up

Agricultural prices have been in a triangle consolidation pattern since the end of last year. But there are signs they might be coming out of that. First, note the RSI is rising, indicating prices are increasing. Also note the MACD is increasing, indicating momentum is picking up. There is also some upside room on the STOs, which are a better indicator when prices are trending as they are within the triangle. However, prices and the SMAs are in a tight range, telling us the market is still "making up its mind", as it were.

Industrial metals are in the same position as agricultural prices -- consolidating in a pattern. Prices and the SMAs are in a tight range, indicating some indecision. However, there is upsid eroom on the STOs, the MACD is rising and the RSI is rising. There are a lot of reasons for prices to move higher right now.

Underlying both of these sectors is the anticipation the economy will rebound, meaning there will be an increased demand for both food and the raw materials of industrial production (industrial metals). The question is when will the rebound happen? We'll get to that a bit later.