Crude Oil Leads Broad Commodity Surge

Most raw commodity futures markets saw another bullish upside surge this week, led by a strong rebound in crude oil futures prices, which pushed above $96 a barrel Friday.

The Continuous Commodity Index, which is a basket of around 20 major raw commodity futures markets rolled into one composite price index, soared to another fresh 35-plus-year high this week, highlighting the stunning appreciation in raw commodity prices the past few years.

Continuous Commodities Index

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Source: Futuresource and TradingEducation.com

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Crude Oil Leads This Week

Crude oil futures on the New York Mercantile Exchange this week reversed a price downtrend on the daily bar chart and pushed above several key technical support levels as prices poked above $96 a barrel. The crude market remains a big-brother leader for many of the other raw commodity futures markets.

Indeed, if crude oil prices continue to appreciate and move to all-time highs above major technical resistance at $100 a barrel, then it's likely other commodity markets -- including precious metals, grains and international foods futures -- will also hit or challenge historic highs.

Crude Oil Futures

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Source: Futuresource and TradingEducation.com

Liquid energy markets got some fundamental support this week from cold weather gripping a good portion of the U.S. and driving up energy demand. News that oil producer Venezuela is planning to shut off exports to the U.S. was another bullish fundamental factor in the crude market this week. Venezuelan strongman Hugo Chavez ratcheted up his anti-U.S. rhetoric this week following recent oil-related court decisions that favored Exxon (XOM - commentary - Cramer's Take) over his country.

Importantly, crude oil traders note a seasonal phenomenon that is about to occur, namely crude and gasoline prices usually rally during the March and April timeframe. The liquid energy bulls this week wanted to get an early jump on that bullish seasonal phenomenon.

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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.