Bespoke's Commodity Snapshot (8/5/09)

Below we provide our trading range charts for ten major commodities. The green shading represents between two standard deviations above and below the commodity's 50-day moving average. Moves at or above the green zone are considered overbought, and moves at or below the green zone are considered oversold.

As shown, the energy and metal commodities are all currently at or above their trading ranges. Even natural gas, which has been in a perpetual downtrend, has moved into overbought territory over the last couple of weeks. Interestingly, gold is going up along with oil and the stock market, and the falling dollar definitely has something to do with it.

The agricultural commodities like corn and wheat aren't spiking along with energy and metals, which is a positive for those worried about food inflation. And finally, coffee has bounced nicely in recent weeks after falling to the bottom of its range.

click to enlarge

Comments

[Robert Mart...:]

Oil, gold, and stocks are trading together because we are in a liquidity boom. Monetary and fiscal stimulus is lifting all boats, as usual. The fundamentals will eventually follow, bringing inflation along with the ride. But right now momentum has the day.

Aug 06 09:20 AM

[keenstyle1:]

Ahh, I don't think so. They're all trading the same way because all of those funds are herding, that's all.

Aug 06 09:43 AM

[BullnBear:]

I agree that the falling dollar definitely has something to do with the gold, oil, and stock market moves, odd to see it all move in tandem.

I believe that corn, wheat, soy beans, etc. aren’t spiking due to the changes that we are going to be facing in the U.S. around exports as more countries “modernize” the methods that they use for farming.

Aug 08 03:26 PM