Bespoke's Commodity Snapshot (8/25/08)

Below we provide our trading range charts of ten major commodities. The green shading represents two standard deviations above and below the commodity's 50-day moving average, and moves above and below indicate extreme overbought and oversold levels. It's no news that commodities have suffered major pullbacks over the last two months, and the charts below provide a good view on how bad it has been.

After trading at the top of its range for what seemed like forever, oil finally traded to the bottom of its range late last week, and after touching extreme oversold territory, it finally bounced for a couple of days, only to see big declines again on Friday. Like most other commodities, natural gas unfortunately hasn't gotten a bounce. Since touching 13.58 in early July, nat gas is down 42%.

While gold declines from $1000 to under $800 make the headlines for precious metals, platinum and silver have actually gotten hit harder. From their peaks, silver has fallen 38% and platinum has fallen 40%.

Corn, wheat, orange juice and coffee have actually staged some pretty good rallies off of oversold levels over the last couple of weeks. Wheat almost touched overbought territory last week, but all four are still well off their highs earlier this year.

click to enlarge

Comments

[MARK&SHARK:]

Nice charts,the only problem is that most investor's account is bleeding from all this.But it is definitely beter to make a living selling pictures than trade as many of those that were wiped out years ago from all different markets today are experts on those.

2008 Aug 26 07:02 AM

[User 170056:]

Mark, you just lost a chance to stay shut up. What a loser.

2008 Aug 26 08:46 AM

[epeon:]

Why do you not consider coal to be a commodity? Coal's rise in price has been the predominant reason that natural gas has gone down since it has been effectively displacing natural gas in utility use.

2008 Aug 26 09:05 AM

[NOWHEREMAN:]

Coffee and wheat look the best for a run to the Upside.

Oil needs more sideways as does NG. The Big Kahuna is Hurricane Gustav which appears to be making a Bee Line directly for the Middle of the Gulf.

Doesn't matter what the charts of either Oil or NG look like. Currently Gustav is projected to be a Cat. 3 when it enters, if it enters the Gulf.

2008 Aug 26 09:33 AM

[Urbane Gori...:]

I like the look of UNG compared to both KOL and any of the OIL ETFs... UNG has a nice smooth saucerlike left side and a nice smooth bottoming appearance. Aside from any shocks form this weekend's potential hurricane, I'd be looking to get long UNG at the beginning of Sept for the Winter season. I guess what I really like about it so far is it's lack of choppiness... It would seriously be nice to take a valid guess at a direction for a change without it whipsawing..

jegan ;-)

2008 Aug 26 12:12 PM

[buyitcheap:]

Consider some of the ultrashorts as a hedge too (AGA/DAG, I believe). I agree the longer term trend is up, but as one of the other posters said, the whipsawing is enough to make one seasick.

2008 Aug 26 01:57 PM

[January Thaw:]

To epeon: Did you hear the report that Arch Coal is the play to go
if you want to capitalize on the electric car????

2008 Aug 26 05:12 PM