Watch for U.S. Dollar 'Jawboning' from Officials

This week's trading action saw crude oil, gold, corn and wheat futures score new all-time highs. The Euro currency also scored new all-time highs against the U.S. dollar this week. Other commodity futures markets this week traded at multi-year highs.

In the meantime, the value of the U.S. dollar hit an all-time low against several of the other major currencies. And the U.S. stock market continued to suffer, as the U.S. is either already in an economic recession, or teeters on the brink of such.

Speculative monies from around the world continue to flow into the long side of the raw commodity futures markets -- especially crude oil and gold -- amid the weaker U.S. dollar, weaker U.S. stock market and worries about the health of financial institutions.

Mature Bull

Indeed, strong price uptrends in the grains, precious metals, liquid energies and other markets are still firmly in place with no early, strong technical signals to suggest market tops are close at hand.

However, many commodity futures markets are mature bull runs -- and arguably very mature. These mature bull markets are fraught with high volatility and the risk at any time of steep downside price corrections in the major uptrends.

Until the near-term price uptrends on the daily charts for those bullish commodity futures markets are soundly negated, traders are still going to view any setbacks as buying opportunities. Even stronger clues that market tops would be in place would be downtrends developing on the weekly charts for those commodities.

Discerning the Markets

Importantly, it has become apparent there is one key market to closely monitor to determine where most of the other markets are heading: the Euro. As the Euro hit a new all-time high against the U.S. dollar this week, the bullish commodity markets followed with strong price surges themselves.

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At time of publication, Wyckoff had no positions in the stocks mentioned, although positions may change at any time.

Jim Wyckoff is a senior market analyst for TradingEducation.com a free educational Web site. In addition, Wyckoff writes a blog offering current market commentaries every morning on TraderBlogs.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Wyckoff appreciates your feedback; click here to send him an email.