In another bizarre week for Commodities, the excitement continues. The Industrial metals continued to fall, Soybean and Wheat also let go. Oil, Gasoline, and Heating Oil all rallied. Gold dropped and finally had a mini rally on Friday. Gold mining stocks soared relative to Gold which continues to be a trade idea I like. Notice the surge in the top panel. This is the ratio of Gold Miners to Gold. When it surges higher, the Gold mining stocks are outperforming which is usually a great place to get bullish.
Here is a longer term picture. When gold miners surge, its nice to be on board. This is why you like to own gold miners instead of Gold. Gold moved about 30%, the average of the miners moved 150%!
The oil chart seems almost the opposite where the Production companies are underperforming the move in crude. Will they catch up or will oil roll over? Usually when the production companies underperform it suggests weakness coming into oil. That's hard to tell as the whole sector was on fire going higher! We can see XOP move up, but look at the ratio on the top panel. So I am a little worried about oil continuing the price gusher.
Here is the half year review edition of the Commodity Countdown. I focus in on the setup in Gold and silver. Remember, commodities should be bought near their lows! The Nasdaq and the Toronto Stock Exchange both failed to hold their breakouts to new highs so this week is important. The Bullish Percent indexes are particularly precarious.
I produced another edition of The Final Bar this week. I laid out the case why I am very concerned about the global market situation. A quick 1/2 hour! It airs Thursdays at 5 PM ET and is repeated throughout the week on StockCharts TV. You'll find the short cut to the video below. You can also catch it on my Vimeo channel or on the StockCharts.com YouTube Channel.
Here is a screen shot of 16 different indexes and where they are in terms of a buy or sell right now. My favorite is the PPO trend as it is one of the earliest, but even the PPO signal suggests trouble ahead. The RSI below 40 is the slowest signal. The percentage below shows how many indexes are still on a buy signal depending on your indicator. SPuRS is the relative strength compared to the $SPX. The bottom line: most markets are on a sell signal. More on the video. Makes the video pretty important!
For Canadian investors, here is a copy of the most recent Canadian Technician video. Canada suffered a failed breakout this week and I'll review that on Tuesday's fresh new update.
If you are missing clues on signals in the market, follow me on Twitter and check out my Vimeo Channel often. Bookmark it for easy access!
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com