DBD Strategy Daily - COMMODITIES AT MAJOR LEVELS
This market is hard to decipher. Many very important long-term levels are being tested. It takes a while before long-term signals are triggered. One has to allow for a certain "thickness" of the level, plus the need for a monthly close to confirm breakouts, and last, the risk of false signals if the monthly close is near the resistance level... One such important signal that should be monitored is on Commodity indices. They are breaking above long-term levels, pushed of course by Energy prices, but also by Cereals. Those signals would clearly increase the risk of rising inflation in the coming months. We cannot say today that those signals will come right away. Though important levels are being tickled, monthly contrarian indicators are extremely overbought for most commodities. We are happy following those signals in the short-term, but it is too early to change long-term scenarii.
DayByDay is an independent research company providing global macro and single stock analysis, recommendation and allocation based purely on behavioural finance methods. Those include long term cycle analysis, sentiment analysis, and technical trigger. DayByDay serves all clients in need of practical and precise publications to make effective market decisions, on any time horizon, from a few hours to a few years.
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