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Commodities Preparing for Upside Breakout


Monday April 30th, 2007
Commodities Preparing for Upside Breakout
by Mike Paulenoff www.MPTrader.com
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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