Against the backdrop of cryptomania, the whole world and the iron bulk stock market in 2017, raw material prices seem to have been left aside. However, there are several commodity market signals that are worth looking at.
First, the Standard & Poor’s gross return index (GSCI), which tracks 24 raw materials, moves near a record low value to the SP500. This, taken together with the end of the 10-year economic cycle, gives us reason to believe that the next bullish commodity market will start in 2018. “says Shawn Hackett, President of Hackett Financial Advisors in Boynton Beach, Florida. After the 2008 crisis, stocks shouted to be bought on this benchmark and it turned out right, Hackett added.
But are there the first technical signals that the trend is changing? Let’s look at PowerShares DB Commodity Tracking, an ETF tracking commodity prices globally. The big picture shows us that the main diagonal has been pierced, followed by a test and rebound from the former resistance zone, now a support zone.
Looked closely, we see the presence of an inverted H & S just before the breakthrough of the long-term diagonal. In the short term, the price generates an upward trend, with current levels being suitable for long positions, with a view to good positioning even in the ‘onset’ of the bullish trend. The CCI 50, which shows us the main movement, is above zero and confirms both the breakthrough and the upward channel. If we take an entry now, SL is worth setting at about $ 15.50. However, if the price makes a deeper adjustment, it’s good to look for Price Action for Long at levels close to the lower diagonal of the ascending channel and SL below it.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov