Commodities Race to New Highs

May 8, 2008: 7:12 PM CST

Do you know where commodities have been lately? Does it matter to the market? Let’s take a look at a few select commodity indexes to see the new highs made on some of these indexes today.

First, the Goldman Sachs Commodity Index:

Notice the extreme price movement that created the surge which took this index to new highs.

Now, let’s compare this to the more popular (and probably more widely followed) $CRB Index:

Notice it made new intraday highs but closed right on new high territory. Price may be forming an ascending triangle (bullish) pattern, as the lower trendline appears strong because it has been tested at least four times.

Let’s examine two commodities – one to be serious, and the other to be fun.

Crude Oil Prices ($WTIC):

Crude Oil has been frequently mentioned on the news as making new highs.

The Bull Flag (not shown, but mentioned previously on this blog in my price projection post: “Crude Oil Gushes to New Highs” – I called for a target near $124 per barrel) has resolved and achieved its price target, and so that is no longer the dominant technical chart pattern in play now. The recent surge resembles some sort of ‘blow-off’ top complete with momentum divergences (also not shown).

Finally, let’s look at an index you’ve probably never seen before – The Goldman Sachs Livestock Index:

I wanted to show this chart ($GVX) because of the amazing and remarkable gaps (that can occur with these commodity markets) from early to mid March. Recall that futures market can go “lock limit up” where trading ceases for the day and few orders can be filled. It’s an interesting twist to futures trading that can scare away new traders.

Nonetheless, the index itself is near new highs (2007 showed highs of $250), the price action is interesting and very volatile – but it serves as an interesting contrast to the many stock and index charts you’re used to examining.

For more insights on commodities, futures trading, and even stock trading (including proprietary trading signals, analysis, scans, and trader interaction), join the Market Club.

For some real ‘heavy lifting’ analysis software, check out Tradecision – readers receive 15% off the one-time purchase (no monthly fees).  I’m still mastering this amazing software tool available to retail traders.

2 Comments

2 Responses to “Commodities Race to New Highs”

  1. TObject Says:

    if Tradecision so good why you use StockCharts.com charts?
    Where is consistency?

  2. Corey Rosenbloom Says:

    StockCharts is more widely accessible, and also more familiar to readers, not to mention it is free and you can replicate exactly the chart I show.

    I trade with TradeStation but the charts are too large for the limited screenwidth of the post, and Tradecision is the same way.

    I occasionally show TradeStation charts and am new to Tradecision and will be showing charts from it – likely in separate windows – soon.