We have been turning progressively more bullish on commodities as evidence has accumulated from individual members of the group - all updated lower down the page in this edition. Now we also have daily-scale bottom extensions in two of the indices that we follow:
These two signals (and the individual ones shown later) argue for some more rallies to come, but these may not travel very far. We try to take the long view where possible and in commodities we note that long-term bear moves are usually followed by a period of 'bumping along the bottom' before any sustained bull move can occur. We think that is what is happening now, as evidenced by these weekly-scale top extensions, which will inhibit any multi-week rally:
This seems to mean that the rallies that have already will stall before long - we will try to identify the moment when the highs are being made but the likely horizon is a few weeks, not more. Let profits on long positions run for now, but don't expect too much.
Here are updates to the original signals, which started some weeks ago:
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com