Thursday's webinar was bearish and Friday continued the theme. Here are some of the charts from that webinar series.
$NATGAS made fresh 13 year lows this morning. Price shot below previous lows, taking out stops down there. Bottom pickers may be interested in shopping there.
Crude Oil ($WTIC) continues the surge down. Crude oil lost almost 12% from last weeks close to this week's close.
10% moves in commodities happen, but that volatility can be a suggestion of price nearing washout levels. As we continue to take out the lows, we are approaching the 2009 lows at $33.55. Early Monday lows were under $34.55 so we are within $1 of the next area of support. Below that would probably $5 increments down to $30, $25 and $20. As we approach these lows, bottom pickers will be at work trying to limit their downside risk.
Investors will need to decide if they are staying with strong stocks or trying to buy the down-trodden. While some bounce is going to show up, the macro demand picture does not appear to be tightening fast enough. This low might be the momentum low, rather than the final low, similar to 2008-2009.
Canada sets sail for new lows.
Bonds continue to break out to the upside in price.
$TRAN makes new 52 week lows.
But the granddaddy of them all has to be the $CRB. It is plummetting away from the forty year trend line.
Here is BHP. One of the biggest commodity companies in the world. BHP continues to make lower lows. This is down 50% this year. For traders, this is a maybe, but for long-term investors, this does not appear to be building a base. The message would be these are still falling knives. Maybe we get a reversal heading into the new year, but that is not showing on the charts yet.
The bottom line is the drop in the commodities is starting to put pressure on other industries. Sign up for the Commodities Countdown blog, below this article, to receive them in your email by clicking on the yes button. I'll be working with Martin Pring tomorrow to bring you his Market Roundup Live webinar. You can register for that by clicking on this link. Market Roundup Live.
Good trading,
Greg Schnell, CMT
