The overall trend of commodity prices has been higher for many months. From late 2001 to the present, the Commodity Research Bureau (CRB) Index has more than doubled.
As the chart below clearly illustrates, the move has been steady, persistent and generally uninterrupted, other than for brief corrective declines.
My MAC (moving average channel) indicator (note the red and blue lines) has served as technical support when the index has declined. Although not perfect, the MAC has been a very effective tool for tracking support.
In a recent article, Martin Pring pointed out that there could very well be danger in the commodity price trend given some of his indicators. And I agree.
As Mr. Pring stated, the mere presence of technical warning signs does not, ipso facto, lead to a decline. A bearish forecast is not a call to action; rather, it's a red flag!
Commodities on the Up The CRB index has more than doubled since late 2001
Food Monsanto Cultivates Upside 6/29/2006 8:36 AM EDT The seed company beats on the top and bottom lines.
Technical Analysis Last-Hour Save Just Delays the Inevitable 8/24/2006 8:47 AM EDT Many stock charts now resemble those of staggering techs in 2000 as the market limps toward a peak.
Technical Analysis Several Ethanol Plays Losing Energy 8/11/2006 1:36 PM EDT These stocks are down, but not out, if you add to positions at value levels.
Technical Analysis Psychology vs. Reality 8/24/2006 7:07 AM EDT Numerous issues are weighing on the market, but whether they're valid or not might not matter.
Energy 'Gaping Holes' at Xethanol 8/17/2006 9:22 AM EDT Some question credentials at the biomass-to-ethanol player.
Technical Analysis Bulls Need Seller-Push to NDX 1525-30 8/24/2006 8:47 AM EDT If sellers can push the Nasdaq 100 index back to this gap-fill level, that'll strengthen a buy-the-dip mentality.
At time of publication, Bernstein had no positions in stocks mentioned, although positions may change at any time.
Jake (Jacob) Bernstein is president of MBH Commodity Advisors Inc. and Bernstein Investments Inc. He is publisher of Bernstein on Stocks, The Letter of Long Term Trends, Short Term Stock Trader's Hotline, MBH Weekly Commodity Trading Letter, Monthly Key Date Trader, and Short Term T-Bond Hotline. His newsletters and advisory services are read internationally by traders, investors, brokers, financial institutions and money managers. His Internet presence includes: Jake Bernstein on Futures and his stock market advisory 2Chimps.com, Seasonaltrader.com and Patterns4Profit.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Bernstein appreciates your feedback; click here to send him an email.
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