From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Markets trend. Trends persist.
Those crucial Dow Theory tenets form the foundational premises of technical analysis.
As technicians, identifying trends is a central component of our work.
But, most of the time, markets remain range-bound, as we experienced during the choppy mess that dominated the stock market and so many risk assets last year.
However, during that time, commodities continued to rip higher.
Now that the rally in raw materials is reaching significant areas of overhead supply, it would make sense for this leadership space to follow stocks and enter a corrective period.
In other words, the uptrend in commodities that has persisted since 2020 is likely to take a breather and turn into a sideways trend.
Let’s talk about it.