Dollar Index in a downtrend

Dollar Index seems to have broken down from important trendlines and support levels. The trend is down in the Dollar Index which could be bullish for Equities and Commodities

Global Indices and Commodities Update

The risk markets (like equities and commodities) have all corrected and the risk averse markets like Treasuries and Dollar Index have been rallying as a result of the Japanese situations

Global Indices

SP500 has closed below 50 DMA and a key support zone at 1300. So it could very volatile here It has support at 1182.

Dow Jones has support at 11000.

Nikkei – obviously been devastated because of the Tsunami. It has support at 8800 but if that doesn’t hold the next support is at 7000, a level which we tested twice in 2008/09. The Kobe earthquake in 1994 led to 30% decline and stopped at a 1992 support zone of 14000.

FTSE has support at 5500 levels.


Commodities

Gold – key level to watch are 1400 and 1380…break of these numbers gives a target of 1300…and break of 1300 is very bad for gold.

Silver had strong resistance at $19 which it took out in july 2010 . Silver could reach a target of $39-40 but its becoming a crowded trade as everybody is bullish so its time to be a bit careful.

Crude Oil – the next support is at 96$..which is 50% retracement of rise from $85 to $107

Base metals – have all corrected below support zones and are expected to be sideways with a downward bias till the situation improves.

Cardamom bearish, support at current levels

Cardamom is in a downtrend. But we have support at current levels of 1050. We might see a small bounce from these levels. But the larger trend is downwards.

There is always a bull market somewhere

There is always a bull market on somewhere. The chart above shows the upward trend in Castor Seed traded on the NCDEX. That is the main adantage in trading a variety of asset classes - some assets are always bullish. Diversification is the only free lunch on the Street!

Agri Commodities bullish

Most Agri commodities are bullish currently. Wheat, Refined Soyabean Oil, mentha oil, pepper, castor seed. Investors should use Commodities as a means of diversification. Those troubled with the volatility of the Nifty would be happy to see the 50-60% returns that most commodities have given in the last 18 months. In India there are three main categories of commodities - Metals, Agricultural and Energies which are traded on the MCX and NCDEX. HNIs have increasingly started using commodities as part of their asset allocation to get superior risk adjusted returns.

Keep an eye on Copper

Gold and Silver are in well established uptrends. For those who missed the trend keep an eye on Copper. As shown in the chart above Copper has overcome a key resistance which has contained prices many times in the past 5-6 years. If this breakout were to hold Copper could be the next trending commodity.

Copper attempting a major breakout

The above chart shows HG Copper continuous on the Comex. It is attempting to breakout above serious overhead resistance. 4.05 which has contained its price several times in the last 5 years. A breakout above these levels should some serious movement in the price of Copper.

Crude Oil - breaking out of range?

Crude oil has closed above stiff resistance around 3875 levels on MCX. A definitive close above 3875 for the next few days is very bullish for crude which has been rangebound for the last 15-18 months. Keep an eye on these levels closely.

QE2 & Commodities bubble

A good article on how QE2 might cause a bubble in commodities

http://www.reuters.com/article/idUSTRE6A42S820101105