The pressure in the equity markets has taken a breather as the Chinese indices stopped their plummet for the moment, sending some mixed signals through the commodity world. One would assume that an across-the-board correction would be in the offing, but we haven’t seen that response as of yet in the energy and agriculture markets.
Crude oil prices are still under pressure after a volatile Chinese stock market trade and a big miss by BP. BP reported a loss of $5.8 billion dollars in the second quarter as oil prices plummeted and lost revenue.
It has been a difficult time for commodities across the board, at least from a long perspective. Until recently, it was the shorts in markets that have been struggling as the global crises like China and Greece did more to stop rallies rather than actually produce any real selling.
Suddenly, markets are hitting trouble all over the place. I can’t tell you how many outs we have left but it appears we are starting to run low. We are coming to the slowest trading period of the year so I don’t think the market is in any imminent danger but I am starting to get concerned about what can happen in the fall.
Crude oil prices neared four-month lows on Friday, set for their fourth straight week of declines, after data showed a contraction in China's factory sector and the dollar rose against a basket of currencies.