Sunday, August 22, 2010

Why I'm bearish on Commodities

I don't even want to go into a China or Peak Oil discussion, therefore I let the pictures do the talking. The CRB looks awefully bearish and the entire bounce out of the crisis looks like a dead cat bounce. Not all charts develop such a clean structure as some of the commodities like Oil (similar to CRB) or Gold, but when they do they usually are high %.

What does it take to change my assessment to the bullish side:
  1. Price needs to recapture convincingly the SMA 55wk (we just did the opposite)
  2. We need the RSI to enter the RSI ZONE above 70 (better a good spike to 75+)
  3. take out of the 280 level (better the 295+)

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