This week's commodity trading featured many strong counter trend moves. Many of the markets saw swift turnarounds in trends that have been established for weeks and months. The 64 million dollar question is; "What's Next?"Here is what I've defined as established trend and counter trend moves.The following markets are share the following traits:
1) They are all near their respective 13 week highs or, lows. The market began within spitting distance of its recent extreme.
2) Their weekly sentiment readings are > 70 or < 30, respectively. Each market has a large, one sided public following.
3) They've experienced a large 5 day counter trend move. All week the market has moved conter to the public's expectations.
4) Thursday's ranges were larger than average. The market has moved far enough to force traders into action.
These criterea do a reasonable job of establishing a market direction and bias. Now, what can we learn from this. Is the counter trend move done? Does the longer term trend hold? Are the market's topping or, bottoming out? Based on the following statistice, we can see that not all of the markets react in the same way.
Here is what to look for in a general sampling for the coming week. We can expect, in order of predicted strength, the following markets to bounce from the week's declines.PlatinumNatural GasCrude OilSoybeans
Sugar looks like it will continue to decline, reaching a projected low of 1111 approximately 7-8 weeks from now.
The S&P 500 shows the strongest statistical bias. According this week's events, we can expect the S&P to continue its rally over the coming month, peaking around 1312.
