Apr 30

Commodities Preparing for Upside Breakout

The PowerShares Deutsche Bank Commodity ETF (DBC) continues to consolidate in the 25.80-25.20 area, preparing for an upside breakout that should propel the commodity ETF towards my next target zone of 26.80-27.30. How can we have rally potential in the bond market at the same time the DBC appears to be breaking out of a major base formation? In an over-simplified explanation, my sense is that China's demand for physical commodities by itself could support the market for a while, at the same time the sluggish U.S. is inspiring lower longer-term interest rates.
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Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!