Commodities Broad Consolidation Underway

Short-term weakness in August for CRB; upward pressure back by September; 400 to 420 main support zone in consolidation
• Broad, flat trading pattern potentially building; increased caution needed over the next two to three months
• Range-bound trading continues for oil above $120 support level this month; peak price remains at $141 to $147 for 2008
• Natural gas finds support at $9.00; target back to $14 by 4th quarter.

Of the four main markets – currencies, commodities, bonds and stocks – natural resources are the clear winner in this game. Much to the likely dismay of big-cap, blue-chip equity investors, tangibles are providing portfolios with welcomed profits in a bear market. And this pattern is not expected to change in the near future. With the mighty greenback steadily drifting lower (the U.S. is $9 trillion in debt, and counting) and China’s and India’s economies expanding at more than 8% gross domestic product (GDP), this secular combination of events remains very bullish for commodity-based investors over the long term.