It is all about commodities this week.
Starting with the little chart of gold I included last week. Just look at what it did. Once it was clear of the upper part of this triangle it went on to post a new closing high. As I have said before, once gold breaks out, it won’t be a matter of trying to include targets. It is a whole new ball game. Just like to see a few days of trading here to confirm the breakout.
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Highlighting gold from another angle, an old favourite that I haven’t included for some time – DUST. Two times bear of gold miners. Look how it has broken down out of its lovely uptrend. And a bit of volume with it.
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But look at this one. LIT ETF in black, and price of lithium in red. The price of lithium has gone up for
three days in a row. I know it isn’t very much, but it is better than going down. Have to be a bit careful here with the stocks as they have already gone up for eight consecutive days. Any weakness is another buy.
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Along the same lines – ACDC Battery ETF. Just look at that fabulous base pattern. Have you ever seen anything that looks better? Here again had a few up days but any pullback to the top of that base pattern would definitely signal another buying opportunity.
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Look at oil – just nudging that little pattern as well.
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This one continues to frustrate me – B.Com with the single line which is the ratio against the S&P. Just looked where this line closed. After all the other beaut commodity charts, I nearly threw this one out in sheer frustration. Will only need one better day and I think the deed will be done.
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Now what do we make of this – the coal price. Is that a big, rounded bottom? An interesting line there through all the high points. Worth keeping an eye on this market.
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But here is the one that still worries me – the price of iron ore. It has now snuck back into the lower support of that big pattern formed over the last two years. It is a bit of a negative, so we need to keep an
eye on this.
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The price of nickel has almost dominated all commodity reports. Yes, it has had an awful fall but it has now nudged the downtrend (Note that I only get the close in these figures now whereas the historical material included high/lows). I am not saying that this market is a buy, but longer term what we need to keep in mind (and my following comments are not really aimed at anyone in particular) but over the years we have seen quite a number of crises in commodities. Perhaps the aim here is to drive out all other competition by pushing the price to uneconomic levels and then once the other producers disappear off the scene, prices would be quietly increased. As I said, a long-term picture here, but something to keep in mind.
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And now to look at how the effect all these commodities are having on our mining index – XMM. The picture here is so similar to what I have been highlighting on BHP. XMM pushed into the support band which has long term implications. We closed on the downtrend at the end of last week – can we now break out of this decline since the January high. At the bottom of the chart is my OB/OS Index and as we can see, it is reasonably oversold and just nudged the downtrend of this indicator on Friday. Could all this mean a better outcome for this sector. Would be nice wouldn’t it.
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Then when we turn to the daily chat of XJO – nudged higher again last week. I have arrowed a line which I think has longer term significance going back to the low in October 2022. Have we formed an upslanting wedge here? Watch the uptrend.
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Last week I commented that I felt so many markets were on the verge of giving us signals. I think we had a few and probably a few more coming this week.
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