Crude Oil Leads Broad Commodity Surge

Wheat Leads Other Grains Higher

The wheat futures markets have seen an extraordinary bull run the past several months. New all-time highs have been hit in all three U.S. wheat futures markets -- Chicago soft red winter, Kansas City hard red winter and Minneapolis hard red spring futures. The monthly continuation chart for nearby Minneapolis wheat futures is one example of just how powerful have been the price rallies in the grain futures markets.

Gold Pauses

The gold futures market backed off a bit this week on some profit-taking pressure, but no chart damage was inflicted. The bulls still have the solid near-term and longer-term technical advantage. With crude oil futures prices pushing sharply higher this week and the U.S. dollar weakening significantly against the other major currencies this week, gold futures are poised to make another solid push higher in the near term, including a challenge of major psychological resistance at $1,000 an ounce.

Fresh speculative money from individual traders and pools of speculator monies (called funds or index funds) have helped to propel this latest surge in raw commodity futures prices. Investors need to keep an eye on the Continuous Commodity Index. When that index starts to back down significantly from historically high levels, then that will be an early warning signal for investors that the major bull market run in commodities has hit a peak.

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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.