Crude breakout signals commodity rise

By Colin Twiggs
November 3, 2017 10 p.m. EDT (1 p.m. AEST)

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Most significant news of the week was Nymex Light Crude breaking resistance at its two-year high of $54.50/barrel, signaling a primary advance. Retracement that respects the new support level would confirm the up-trend.

Nymex Light Crude

The next major resistance level is at $60/barrel, shown on the 5-year chart below.

Nymex Light Crude

The breakout follows Brent crude's earlier breakout above $55, signaling a primary up-trend.

Brent Crude

Crude prices are a major factor in commodity prices due to the high energy costs of extraction (hard commodities), cultivation (soft commodities) and transport (both hard and soft). Rising crude prices are likely to cause a broad rise in commodity prices, with the DJ-UBS Commodity Index testing resistance at 90.

DJ UBS Commodity Index

Iron ore is more susceptible to cycles in the Chinese real estate market but is likely to find support above $50/tonne if crude prices rise.

Iron Ore

Even gold would be likely to benefit as it tends to rise and fall in unison with crude prices over the long-term.

I can't tell you how it came to take me so many years to learn that instead of placing piking bets on what the next few quotations were going to be, my game was to anticipate what was going to happen in a big way.

~ Jesse Livermore


Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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