Have commodities hit bottom?

Market Pulse: Oct 10, 2011

Looking at the CRB Index (CCI) we see it opened last week at 570.59, hit a low of 563.19 and closed the week at 574.71. Looking at the charts below you can see that both the daily and weekly show this market has been in a range between 620 and 660. The market broke below this range on Sept. 22 and did not stop dropping until hitting last week’s low of 563.19. Of course, once again we are seeing new 52-week highs in commercial positions in many markets. This is the time when you will want to watch for an exit if you have taken shorts in the markets and are sitting on some solid OTE like we are at Trends in Futures. For all of you grain traders, make sure you are aware of the Wednesday WASDE report being released. It could cause a major move in the markets. More importantly, you will want to keep an eye on the COT week to week. If we see commercials moving away from their 52-week highs, then you can expect that market may have hit its low. It does not happen in a day or even a week. It is just the underlining big money movement in the market you are trading, movement that will affect the markets sooner or later. Of course Merkel’s comments once again are affecting the markets today, supporting the banks with tax payers money.

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