All Commodities Extremely Overbought Except OJ

With commodities now the trade du jour, more and more people are following them. Below we highlight our trading area charts for ten major commodities. The green area represents 2 standard deviations above and below the commodity's 50-day moving average. Every single commodity is currently trading in extreme overbought territory except for orange juice. At some point, these commodities will see declines, and the more parabolic they get, the harder they will fall.

click to enlarge

Comments

[Gunslinger:]

Can you please put a disclosure disclaimer on this group? I would suggest no further publishing until this is done.

2008 Mar 06 05:18 PM

[HarMegiddo:]

HaHa overbought AGAIN. SLV stills goes up, GLD still goes up, even the DBA is up since the last time he wrote this dribble.
same story, different day. just another guy who is way, way behind the commodities trade.

2008 Mar 06 05:29 PM

[commonman:]

Your "analysis" suggests that the following commodities were "Extrememly Overbought":

Oil @ $95; Natural gas @ $8.5; Silver @ $16; Platinum @ $1700 etc. etc. etc.

Your article is completely unhelpful b/c you offer nothing about supply/demand/speculat... investing.

2008 Mar 06 07:23 PM

[Greg Pinelli:]

The only rise I see that resembles "parabolic" (an upward slope that is steep and suggests a blowoff) is platinum. Could there be a correction? Of course..but in an environment where monetary restraint worldwide seems nonexistent it makes one wonder..Why would there be? And why would it last very long?

2008 Mar 06 10:44 PM

[lowem:]

Dude, this is exactly what happens in bull markets - they go into overbought territory, and they stay in overbought territory.

And the first commenter has a point. There needs to be a disclosure on this piece. If the author is shorting commodities, then I will see you on the other side of the trade, so to speak (long GLD, GDX, DBA).

2008 Mar 06 11:31 PM

[sbenard:]

This article is nothing more than opinion with charts of Bollinger Bands. John Bollinger himself says that Bollinger Bands alone aren't sufficient to make trading decisions. I use them all the time, but I wouldn't dare be so bold as to make predictions based solely upon them like these guys. I suppose if they keep saying "commodities are overbought" long enough, eventually they'll be right. Whether its tomorrow or next year, I don't know. Neither do these authors!

2008 Mar 07 12:01 AM

[SA Editor J...:]

Editor's Note: Seeking Alpha insists on a disclosure in all articles. No disclosure at the end of a piece means it is not considered relevant.

2008 Mar 07 03:10 AM

[Michael Fer...:]

All commodities except OJ overbought?? Look at global stocks as well as S-U ratio in just about every agricultural commodity and put in historical context (meaning before March07).

2008 Mar 07 08:19 AM

[goldragon:]

I guess that these two guys have a lot of short on commodity, otherwise they do not have interest to write such articles again and again. The funny thing is that every time they write, the price of commodity is up.

2008 Mar 09 04:14 PM