Saturday, March 26, 2016

A Look Back At The 4 C's: Commodities, Coffee, Crude, Copper

Sometime ago I correctly pointed out that a bullish declining wedge was developing in a number of commodities (DBC, JO, USO, JJC). If anyone is still keeping up with them, their break-out patterns I think have run their course and are now retracing. Next week is an interesting week as Northmantrader.com has pointed out with resistance on a number index charts such as the Russell and S&P being met and the possibility of a sharp turn back.

Coffee: JO
Coffee had one of the most aggressive downward wedges and as a result had a really strong breakout. It found resistance at the 38.2% Fibonacci retracement level and might return to $18.52 to $19.47.
Commodities: DBC
The declining wedge for Commodities ETF DBC was a little less aggressive but none-the-less it broke out and found resistance at the 50% Fibonacci level. On it's fall back we could see support at $12.96 (which corresponds nicely with a proposed channel support line) but also see it go as low as $12.48.
Copper: JJC
Copper ETF JJC made it all the way back to it's 38.2% retracement of $26.50 and is now gently falling back. Support might be at $24.95 which coincides nicely with a proposed channel support line, but if it breaks down support might be at $24.40 or $23.85.
Crude Oil: USO
Crude Oil ETF USO also had a very sharp declining channel which saw it breakout around $8.50 and find resistance early at the 61.8% Fibonacci level of $10.84. It's already beginning to come up to support at the $9.60 level, but support could also be at the $9.23 and $8.86 level depending on how bullish the U.S. dollar is next week.