Bespoke's Commodity Snapshot (6/10/08)

Below we highlight our trading range charts for ten major commodities.  The green shading represents 2 standard deviations above and below the commodity's 50-day moving average, and moves above or below this area are considered overbought or oversold. 

As shown, oil and natural gas are just below the top of their trading ranges, but corn is actually the most overbought of them all.  Corn's 13% rally over the last 8 trading days has put it 2.68% above the top of its trading range.  Precious metals, wheat, orange juice and coffee remain in neutral territory.

Comments

[Contrarian ...:]

Over the last six summers, gold has bottomed somewhere between mid-May and mid-July. In most cases, the bottom has been between late June and mid-July with two exceptions. Check out this chart...

www.contrarianprofits....

2008 Jun 10 02:22 PM

[Hugh:]

Totally meaningless trival. "Overbought" and "oversold" are overused terms that mean nothing.

If something is "overbought," Then is must be at the same time "oversold."

If a trillion ounces of gold were bought in one hour, one could look at the buyers and claim an "overbought" situation, where another observer could look at the sellers and claim an "oversold" situation. Overbought must therefore cancel oversold, making both terms suitable only for the braindead.

Charts are history. They tell us nothing about the future because the future of a complex economy is ruled by billions of variables on an hourly basis. That Iran may or may not be attacked by the United States next week, therefore sending gold to over $1000 per oz, might be hinged on the menstrual cycle of some general's wife. Where's the chart for that?

Its obvious to me that some people write only to chum for business.

2008 Jun 11 04:24 AM

[pockyclips ...:]

Nice line, Hugh. Reminds me of Nancy Reagan consulting the star charts to tell Ronnie when to make major decisions. IF Alfred E. Neuman decides to go out with a bang, no chart is going to tell you
when to by OIL.

2008 Jun 11 08:56 AM

[sorgmot:]

Thanks for the charts. They are very useful in predicting mining company profits, all else being equal. The gold chart shows that that metal was being sold for $ 650 per oz. in the summer of 2007 and is now selling for $ 900 per oz. $ 250 per oz. more to the bottom line.

The Barrick president says the cost is $400 per oz. so profits should double in 2008 versus 2007. Perhaps, the stock value will double too.

See your investment adviser and always diversify your portfolio. This is not a recommendation to buy or sell any stock shares.

2008 Jun 11 09:20 AM

[NOWHEREMAN:]

Charts are used because they work, however sometimes the Braindead interpret the charts. Take gold for example, it is building a mini Head and Shoulders bottom. My interpretation is that the next time it makes a break above $920, a retest of the high will take place.

And while charts are indeed "history", history has a tendency to repeat. Obviously, no one has a chance to change your mind since over-bought/sold conditions do not occur at the same time EVER but rather over a period of time.

My guess is that you must be a multimillionaire by now since you are going against all of the Analysts who incorporate historical PE's into their calculations...which by the way, if graphed, are charts.

2008 Jun 11 09:28 AM

[Hugh:]

History never repeats. The fact that a few trends in Art, Politics, Finance and many others cycle in popularity, doesn't mean history repeats itself.

Take a snapshot of the world today, and unless you live in the television show the Twilight Zone or Star Trek, the snap shot will be different from all other snapshots ever taken.

What makes an economy is human action. We have six billion people on earth, all of them taking action daily. What are the possibilities that all of these players will take the same actions again simultaneously?

Look at the green areas of the above charts. Why aren't these areas extended out into the future? If they can't be accurately extended into the future, the they mean nothing.

If charts worked, there would be no markets. This is profound, study it.

2008 Jun 11 02:55 PM

[NOWHEREMAN:]

Like I said at the start, Charts are subject to interpretation.

Once more, are you at Multi-millionaire? or just a disgruntled opinionaire?

Just because Bespoke did not extend those charts does not mean that they can't be extended. Measured moves based on chart formations can be used.

Are you familiar with "Value Line", been around for 50 years, they use charts extensively. A chart is just a tool, one of many but one that is not ignored.

2008 Jun 11 03:35 PM

[Mongoose:]

Charts are a graph of human emotions and the value is up to the each person to consider. Some time the charts can be manipulated in thin stocks ( called painting the tape). In general the information is not subject to false reports. personally I would not take a position on a rumor with out looking at a chart first. It's not perfect but what is. Good luck with whatever approach you feel most comfortable with.

2008 Jun 11 06:29 PM

[Hugh:]

paultaut,

Look at those charts and tell me what the N.Y. gold closing price will be on June 18th.

Thank you very much!

2008 Jun 12 05:20 AM