Friday, October 15, 2010

CCI Shows Early Signs of Divergence Also

This is still a little early also, but notice that a volume divergence is forming on the daily chart. Have commodities reached their zenith, or are they close to it? Stochastic (not shown) has also shown signs of being overbought, and the MACD is close to being overbought (also not shown), although it isn't there quite yet. MACD, however, is a notorious lagging indicator, while Klinger Volume (seen above) is the best leading indicator I am familiar with.
With Bernanke talking of more quantitative easing today, I find it hard to believe that commodities have topped out, but the signs certainly point at that possibility. Prices must now confirm this by moving lower in the next few days.