EconomicsGlobal

DBC - Commodities Taking a Breather

AMEX:DBC   Invesco DB Commodity Index Tracking Fund
As global markets were slammed this past week after the US-China tensions resurfaced, one area of the market that has felt the brunt of recent market volatility has been commodities ( DBC as a proxy).

With trade tensions resurfacing between the two economic giants, commodities are currently stuck between a rock and a hard place, and as a result of the recent market weakness, it really shows.

Commodity prices are currently at the lower end of their Bollinger Bands with the bands widening, indicating increased volatility for the asset class. Further, the RSI and MACD have both been trending lower indicating that momentum is falling out of favor with the market. Lastly, commodity prices fell out of their envelope pattern, breaching the lower limit of $16.10 and failing the re-test.

Consequently, it appears that commodities are currently under great macro pressures with no signs of it letting up anytime soon.

We would recommend caution to investors who are currently in this space at the moment.