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The 3 Most Telling Price Charts Now: Oil, Copper, 10-Year Yield

These charts tell a story.

Levels have been reached — or are about to be reached — that indicate the possibility of a more permanent change in direction. The commodities price charts may be telling in terms of future inflation possibilities. The chart of a Treasury bond yield may be expressing similar concerns.

Here’s how the daily price of oil chart looks right now:

From $61 to$ 81 in just 2 months time is a 32% move. Sticking to just price chart analysis, without even getting into what might be the fundamental reasons, this is an extraordinary upward thrust. The July high of 76.75 did not provide much resistance, indicating the force of buying present in this market.

After such a dramatic move to the upside, you might expect to begin to see divergences on the relative strength indicator (the RSI above the price chart) or the moving average convergence/divergence indicator (MACD, below the price chart) but, so far, there are none.

It’s hard to see how stock and bond markets could ignore an oil price move up to the $100/barrel level — that’s inflationary no matter what else is going on with interest rates or the price of real estate in China.

The copper daily price chart looks like this:

By connecting the highs of the May peak and the July and September lower peaks, you can clearly see a steady down trend line. October’s break above that line is strong and powerful. There’s no mistaking it. Note that they buying volume bars (below the price chart) picked up as well.

Copper is used to make semiconductor chips, many of which are needed to manufacture the batteries of electric vehicles. Will the new EV’s being manufactured by General Motors
GM
, Ford and Tesla
TSLA
cost more as a result of this copper increase in price? Like oil, it’s another inflationary concern.

The yield chart of the 10-year U.S. Treasury Note looks like this:

You can see how the yield hit a low in early 2020 during the original pandemic scare. After hitting a low of .40%, yields on the 10-Year made it all the way back up to 1.768 before dropping back, finding a higher low at 1.15% and have since climbed back up to the 1.60% area.

Price chart analysts are focused at that March, 2021 1.68% level: if yields go higher than that, the next target would be up around 2%. Such a move might begin to have an effect on stock market investors looking for the safety of “the full faith and credit of the United States” if inflation picks up (see the above oil and copper charts.)

Nothing is guaranteed, of course. How the fuel and metals prices move over the next few weeks may be even more telling. The same is true of interest rates. Comments or actions by federal officials can have dramatic effects.

Not investment advice. Do your own research and always consult with a registered investment advisor before making any decisions.

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