(March 11, 2002) STOCK INDICES: CRB INDEX: Following a choppy six-month period commodity prices appear to be trending higher again. A look at the weekly CRB chart shows that prices have tested long-term support and have confirmed a double bottom formation. It should come as no surprise when we gaze at this chart that we are just now exiting a very difficult trading period when commodity markets did not offer us much in the way of good trends to follow (aside from cocoa and oats). The next few months, if not longer, should offer some very rewarding trading opportunities.
S&P 500--After briefly turning bearish the weekly trend in the S&P's has returned to bullish. Classic technical analysis would suggest that a stronger test of the lows posted following 9/11 is imminent since it is very rare to see a "V" bottom like that go untested. However, the fact that the S&P could only manage a shallow retracement of the last rally (and held confluence support) is a very strong sign. As crazy as this may sound, Fibonacci expansion analysis projects a move above 1400.00 later this year.
