Will Commodity Issues Follow Equity Strength or Commodity Weakness?

This is shaping up to be a very important and a very interesting day for the precious metals and the mining names. With oil inventories putting pressure on U.S. oil prices in general, it remains to be seen if oil's impact presses other commodity prices lower -- in particular, the precious metals.

If the mining issues remain bid, and buoyant today, then we could come to the conclusion that they are following the equity market lead, rather than the weakness in commodities. Right now, my technical work argues in favor of price stability followed by potent recovery rallies in Barrick Gold (ABX) and Silver Wheaton (SLW).

As for the commodities themselves, looking at the daily charts in the precious metal's ETFs from last night's close, a sustained up-day today will indicate that at the very least the corrective leg from the January 3 high at $30.44 in the iShares Silver Trust (SLV) and from the December 7 high at $139.81 in the SPDR Gold Shares (GLD) is over, and that a recovery rally period already is in progress.

With that said, it is imperative that Tuesday's lows at $26.03 and $129.07 remain intact and viable.