Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold, Crude and Copper – Tis the Seasonal to be Checking

Commodities / Commodities Trading Oct 09, 2009 - 01:09 PM GMT

By: John_Winston

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleAs we move into another quarter it is always good to review the seasonal aspects of the market so as to have an idea what (on average) usually happens. The hard assets (and the paper ones too) have amassed quite a rally over the year.


Crude Oil Seasonal Trading

Crude Oil Seasonal Trading Contract

The top chart is the 17 year seasonal average for Crude Oil. And right below it, we have the Light Crude Continuous Contract. As we can see, on average, Crude usually bottoms in the middle to end of February. When we look at the chart, we can see that while crude made its low at the beginning of the year, it remained in a consolidation until the end of February and then Bottomed. Coinciding with that bottom, we can see that the % R oscillator finally came out of oversold area, and the MACD histogram began to register bars above the zero line. By the beginning of March, oil had turned up, the 50 day moving average was overcome, and the seasonal low was in place.

Next we look at the seasonal and see that April is the next peak, but that price moves only sideways to a bit lower until May, where a correction begins and last into July.

On the Crude chart, we can see that the rally did in fact PEAK in APRIL and it moved sideways into May. But instead of continuing lower into June and July, a COUNTER SEASONAL rally developed and when MARKETS don’t do what they are supposed to, a strong rally catches the crowd on the wrong side of the market (like stocks this year).

However, we see that a selloff into the JULY period did indeed happen……..albeit from a higher level. The point is the seasonal pull still produced a July low and that selloff was a decent one.

Now if we go back to the seasonal, we see that a PEAK IN PRICE IS DUE HERE. (The bottom of the chart is time; the top yellow months are CONTRACT months) We can see that the most likely time for Crude to develop a correction is this time of the year. We can see that PRICE is being influenced by this seasonal as crude has been going sideways most of the month and seasonally is ready for a good pullback.

A normal pullback would see Crude at the 47 to 54 area sometime this winter. AS LONG AS MACD histogram keeps rising and %R is above 80, and RSI moves above the 50 area, the rally can continue. %R recently came out of 80, and MACD is barely above the zero area. Combine that with RSI right at 50 and the odds suggest this market is about to make its move in the next two weeks one way or another.

Here’s what to look for. If Crude remains strong (weak US DOLLAR) instead of turning down here, Crude would break the old highs and start another leg, probably into November. I believe it will have a lot to do with what the Dollar does, but there are so many other wild cards (Iran) that projections can be difficult. And I think the sideways action speaks to that.

Should crude hurdle above 77, odds will favor a seasonal delay. On the other hand, if crude were to break below the 50 day average, then the lows of September, then the odds would favor the seasonal being underway.

Next up we will look at the copper market as it is so important to the global growth of the world although not a precious metal, it is good to keep an eye on it.
We can see by the seasonal chart below that copper also is a September candidate for a pullback into the October area, then an end of month blip to November and finally a December low.

Copper Seasonal Trading

Copper Seasonal Trading Contract

The seasonal chart shows that like Crude, copper has a high point in April and a pullback to the July period. Copper is much more PRONOUNCED but the timeframes are similar.

Like crude, copper peaked in April and ran sideways until the May period, pulled a June high, and a July low. And just like crude, copper ran up into September, and has gone sideways. And just like crude was stronger than expected, so was copper. But each has followed the seasonal ebb and tide that its average has established over the years. Coppers technical picture also shows a %R reading that has just dropped out of the 80 range, and MACD histogram is right at the zero line. For the first time in quite a while, RSI has dropped below 50 and has recently made its way back to 50.

It would seem that copper is at a turning point too and the direction should be established within the next few weeks. Above 310 and copper too could be heading higher one more time before the fall correction begins. Below the 260 area and the correction should be in full bloom. We suspect that both commodities will follow each other.

Now let’s look at the gold seasonal. First the gold chart, then the seasonal.

Gold Seasonal Trading

Gold Seasonal Trading

Gold has followed the seasonal pattern very close this year. We can see that a major price peak occurred in mid February right on time, and that a late March bounce to April and a correction to May took place. LIKE crude and copper, the May to JUNE period was a much stronger seasonal upward bias as is the average. We can see by the chart that the gold market usually explodes in September and then has a peak in early October and a sizeable correction into the November or December time frame. Price is usually choppy until December.

Unlike the other commodities, gold’s technical condition is still in BULLISH mode……..although one can make a case that RSI is flashing OVERBOUGHT. We would agree, but we think that %R must drop below 80 and the MACD histogram bars need to stop RISING first.

These commodities have pretty much followed themselves from an ebb and flow standpoint. Copper seems to have been the most persistent rise.

These markets have pretty much followed each other this year and the time has come when all of the seasonal trends seem to favor the downside. Not that they will, but the odds favor a correction to begin sometime between now and November. The stronger the commodities are, the longer before the correction starts. Oil and Copper have already turned over and seem to be waiting for gold to complete its up move. Ok, one more chart.

USD Dollar Seasonal Trading

USD Dollar Seasonal Trading Contract

Yes………it’s the US DOLLAR.

We can see that the year started out right. The dollar made a strong seasonal high in March right on its seasonal schedule. And that is when things turned. The stock market bottomed, and so did crude oil a few weeks before that.

We can see a CONTRA SEASONAL that began in mid April. Instead of moving higher to June the US Dollar collapsed. As stated earlier, this is usually what happens when a contra seasonal appears. The trend becomes strong as market participants are not positioned as they usually are.

It’s been pretty much down since then for the US Dollar.

Conclusions:
If you’ve been having difficulty understanding market behavior lately, these charts suggest to me that the analysis is already what we all know. ALL MARKETS RUN COUNTER TO FUNNY MONEY. Can you imagine calling the US Dollar funny money? That is what it has become. Actually, it’s become UNFUNNY money as the situation is serious.

Look at how long it has stayed OVERSOLD as % R just can’t come out of bearish mode. If you’re saying to yourself, hey, this looks like an EKG of someone who has died your close.

So while the dollar trend is clearly down, there will be at the very least a dead cat bounce. Therefore, we should expect a 4-6 week reprise in the dollar as the seasonal chart suggests. Seeing that the first October period in the dollar seems completed with that little October bounce, odds favor that the commodities correction in gold and even in crude or copper might not arrive until the mid November time frame.

Whenever the time frame arrives we should see the US dollars technical condition show %R come out of oversold, RSI begin to rise again (NOTICE THE HUGE DIVERGENCE THERE as RSI has not made a new low with price) and for MACD histogram to hold the zero level and put in a higher bar. At that point in time, the gold, crude and copper market should begin their autumn correction for a brief time before the next leg down of the dollar begins. Keep an eye on these subtle clues and when you see them it will give you a clue that a short term bounce of 4-6 weeks and a subsequent commodities pullback is probably near.

If things play out, these commodities will take a breather and then resume their trend near year end.

If you would like to receive Free Gold Analysis please visit my site: www.TechnicalCommodityTrader.com

By John Winston

John Winston is the technical commodity trader analyst. He provides detailed technical analysis for popular commodities like gold, silver, copper, oil, and natural gas. By focusing strictly on these commodity price movements trading become strictly technical and simple to trade. His free trading reports are available at his website: www.TechnicalCommodityTrader.com

Contact John at: Info [@] TechnicalCommodityTrader.com

© Copyright John Winston 2009

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Seasonal Trader
12 Oct 09, 10:17
Seasonal Charts

The above seasonal charts are over 10 years old, and as such i would not make trading decisions based upon them.

For relatively inexpensive up to date seasonal charts and analysis I would suggest having a look at www.FuturesResearchCorp.com


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules