Thursday, October 7, 2010

Commodity Trading Range Charts

An interesting way to look at relative strength, courtesy of Bespoke Investment Group.....

Below we highlight our trading range charts of ten major commodities. Most but not all have been on strong runs higher lately.

In the charts below, the green shading represents between two standard deviations above and below the 50 day moving average. Moves above or below the green zone are considered overbought or oversold. As shown, the two most widely followed commodities, oil and gold, are both trading outside of their trading ranges into extreme overbought territory. Silver, platinum, and copper are all at overbought levels as well. Wheat has pulled back to the bottom of its trading range recently, while coffee and orange juice have been heading lower as well. Corn pulled back from overbought territory a couple weeks ago, but it has bounced back some. Finally, natural gas remains in an epic downtrend.

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