Weekend February 18, 2018
I have been keen on commodity markets only to back off as they fell in February. But it looks like that as a last 'shake-out'. Many are either near break outs like gold or at such low levels, low risk opportunities are present. Let's start with natural.
Natural Gas Futures Monthly
Natural gas futures appear to be base building at 2.60. PMO is back to Zero and RSI hovers at the 50% level.
UNG Daily
Most of the natural gas stocks and this ETF of futures have the same look.
RSI at top and PMO at bottom both look like they are bottoming.
Devon DVN
Devon is ten bucks off its recent high and has great financials, balance sheet, cash, etc.
CHK trades for a mere $2.73 but the financials look just awful.
Westport WPRT specializes in natural gas fuel systems. It was highly touted a few years back but the stock has been beaten down to $3.20. Balance sheet is okay but the firm is not making any money. Still the Board of Directors is outstanding. WPRT
WPRT
Here is WPRT on a log scale chart. On balance volume is rising and the price has moved up over the last year. The very long term monthly MAs are coming together. This is usually a sign of bottoming action.
Cliffs Natural resources CLF
CLF certainly looks to be bottoming. Again the MAs are coming together.
Note the big week up 19%! And the MAs are all starting to move up.
CLF Daily
Chart wise this is about as good as it gets. A nice basing pattern, higher lows, OBV turning up, RSI crossing 50, MAs all coming together, and a last shake out testing the uptrend line.
GSG Goldman I Share Commodity Trust
GSG is the I Share for he Goldman Sachs Commodity Index. As such it may be the BEST way all around to play the emerging commodity boom.
GSG Long Term
This chart goes back to $4140 oil at the 2008 peak. But again it shows a nice long term set up for entry. MY only concern is that it is too weighted towards energy with 78% in the energy sector.
Gold
The entire commodity market peaked in 2011 and bottomed in January 2016. We are now two years out form that low. One can see the slow upward path of the PMO at bottom. RSI has found 50% support at top.
Gold Daily
Will try number three be the charm? Gold always participates in a commodity boom. And with bitcoin crumbling and the US Dollar weak, gold will advance to hold up its side of the monetary equation.
Silver
Silver is lagging gold and forming a large triangle. I suspect it will resolve to the upside.
Kirkland Lake KL
And now drum roll please,here is a gold company that is actually making money, can you believe it? Better yet the mines are in Canada and Australia,not Africa.
U S Dollar
The US Dollar has been weak spurring on commodity prices. As over sold as it is, it could rally here. So scale in commodity purchases.
NYSE Advance Decline Line
Here the A/D line is growing more positive.
DJIA INDU Two Hour
The two hour chart clearly shows a textbook Elliott Pattern.Five waves down are done. An A B C correction has begun. The market has traced out
an up down up for Wave A rebounding from the 23,300 low. This sets up the potential for a Wave B pullback. And the fact that large Wave A has now re traced to the top of the previous fourth wave also argues for some kind of top and pullback this next week. PMO has reached the zero level, another reason for caution.
Bottom Line
Markets are moving from an equity boom to a commodity boom. All the Central Bank QE schemes are coming home to roost with higher prices and inflation from the world flood of money by Central Banks.
Social Mood
Trump is up to 47% approval. Despite the negative coverage of the tax cut, individuals are seeing higher take home pay.
The Dems just will not let the Russia story go though nothing has been tied to Trump yet. I am baffled that Trump turned down a deal for the Dreamers and his wall this past week.
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