Many major commodities such as copper and crude oil made important lows during January (while crude made a marginal new low in March, it’s clear that January marked a major momentum and sentiment low for black gold). It’s been four months and many commodities such as copper, crude oil, and silver are well off lows made earlier in the year. However, there are mounting warning signs that we are on the verge of another test of commodities investors resolve:
WTI Crude Oil (Weekly)
Price is stalling around the $60 round number level as relative strength (RSI-14) is finding resistance near the median line (50). With a tremendous amount of technical resistance just overhead and sentiment seemingly much improved, buyers have begun to show signs of fatigue above $60/barrel – a pullback to retest the $54-$56 area would be completely natural.
Copper (Weekly)
Copper remains in a short term uptrend within the context of a longer term downtrend. Upward momentum stalled just below the $3/lb psychological level and fell hard last week. There is a significant support confluence zone between $2.70 and $2.80, however, I would not be surprised to see a dip into the $2.60s during the next couple of weeks.