Friday, June 7, 2013

Commodity Bounce Next?...6.7.13

The commodity model has had a downslope P6 since April 15th after an impressive run up in March and early April.  With today's encouraging US jobs report and Canada's blockbuster jobs report the markets have displayed an impressive rally.  The rally's been on low volume but we've discussed the relevance of that metric previously and discounted it as a critical factor.

If there is true momentum in this next potential leg up for the markets then we should expect to see a parallel move in the commodities, especially the oil, gas, and basic materials...USO, UNG, XLE and DBB so although the model is currently in cash it bears watching.

Today we are seeing some of the week's previous biggest losers becoming the biggest gainers and the X sector model is now all solidly in the green......although the P6 remains downslope.  There's always the risk that what we are seeing is buying as a result of short covering but there's no way to know if this is actually the situation.
The advance/decline is steady at 2.5...clearly bullish...but I'm still on the sidelines for now waiting for clear opening and confirmation from the P6 and or RSQ.
Click once on chart to expand and clarify.