Metals, Agriculture Extremely Overbought

Metals and agriculture continue to soar, and our trading range charts below indicate that they are currently trading at extreme overbought territory. The green area in each chart below represents two standard deviations above and below the commodity's 50-day moving average. As shown, Natural Gas, Silver, Platinum, Copper, Coffee and Wheat are all trading at or above the top of the green zone.

While prices can remain at overbought levels like this in the short term, the risk/reward trade-off for buying at these levels leans towards the risk side.

Click here for a list of commodity ETFs.

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Comments

[iman]

Metals, agriculture, oil, gas, these are REAL things, and things that people need. People dont want to put their money in financials or cash when there is no backing, fiat and speculative stocks are out, commodities are the future.

[wallyjm]

gold is the only real money. paper money is just that and if you hold it in a savings account don't cry over the spilt milk. just get into real things!

[SSROSS]

commodities follow the law of supply and demand and right now the demand outstrips the supply

[01GTvert]

The money supply is pushing these commodities to new artificial highs. The fact the FED and ECB continue to dump money into their economies further supports the continued run up of these items.

[sbenard]

cocoa is also in a bull trend of late.

[ballsschweaty]

As long as Helicopter Ben and our congress believe that printing money is the answer to our economic problems, commodities are the only place to sit if preserving purchasing power is desired.

Until I hear the Fed and/or congress say that we just have to accept a recession as a beneficial cleansing for past excesses, I will stay in commodities.

[User 151439]

After you two guys published this article, I watched the Gold, Silver, Copper and agriculture stocks and ETFs. SLV, GLD, PCU, OIL, USO, and DBA all have risen a lot. [Comment edited for abusive language. Commenter put on notice]
These people made comments to your article are correct. At least they have some common sense. As long as the M3 increases, the price of commodity will rise. As long as our leaders print money to pay the huge government debt and the trade deficit, the use dollar will go to trash, commodity price will rise. The technical indicators can do nothing. If the fundamental is solid, the price can stay above Bollinger bands for a long long time!