Bespoke's Commodity Snapshot (1/12/08)

Down another $3 today, oil looks like it will at least test its low of $33.87 on December 12th. If it fails to hold that support level, $30/barrel is the next stop. From our trading range charts below, oil and natural gas are the commodities closest to oversold levels. Most other commodities are trading closer to overbought levels, although they have pulled back slightly over the past few days. Coffee is actually the most overbought commodity at the moment, and it just broke out of a multi-month trading range.

Recently, we highlighted that the ratios of gold to silver and gold to platinum had gotten out of whack, with gold outperforming. However, these ratios have just started to move slightly back inline, as silver and platinum have outperformed gold over the past couple of weeks. The trend will need to continue for some time, however, for silver and platinum to trade back to their average historical ratios with gold.

Comments

[Conan the B...:]

So, for a change, how about an investment recommendation?

If you are going to provide charts, how about something in addition to Linear charts with Bollinger Bands, Something simplistic like volume, stochastics, MACD, etc. just to give more info.

Jan 12 04:53 PM

[Bruce Pile:]

Of what use is a Bollinger Band anyway? With stocks, you don't really want to go by selling when they are near the upper band because a stock typically rides the upper band all the way up a monster climb. The only time you should be trading in the center of the band is when the stock is wandering and doing nothing. Do you buy a stock to wander or to do a monster climb?

Jan 12 08:46 PM

[Conan the B...:]

Bruce: right on, Bollinger Bands are an Equity indicator not used by commodity chartists.

The only thing I can think of for the above charts is that they wanted to emphasis the lines without using much effort. IMO

Jan 13 10:09 AM