The long awaited Beijing Olympics have begun. The trends we have talked about over the past four to six years in many commodities look to be changing as the 'build-out' of the Chinese economy has hit its zenith. The Chinesse consider 08/08/2008 to be a very signficant date and I am starting to believe it too! Could this be the pivot point for the commodity markets? From a short term perspective, not less than 13 new commodity trends establish themselves this past week (please refer to WCTS posted at http://www.the-rational-investor.ocm/WCTS080808.pdf).
One result, the S&P 500 index looks to have bottomed amid the commodity market meltdown. On cautionary note - commodity prices themselves are very volatile. After these markets settle down, one ought to expect some sort of test of the old highs. As well, most bottoms require a retest of the initial low. Looking at the chart above one can see how the SPY rallied sharply from its recent lows at $120. When the commodities retest their recent highs I will be expecting a test of the $120.02 area again on the SPY - but hey lets enjoy the rally while it lasts.
We have hit the short term 50% level and are flirting with the fast moving average at $130, should we consolidate and then break higher, one ought to expect a test of the medium term bear market trend channel at or near $140.00....
Enjoy the bounce while it lasts. That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
No comments:
Post a Comment