Profile: The S&P GSCI Industrial Metals Index provides investors with a reliable and publicly available benchmark for investment performance in the industrial metals market.
The primary uptrend is intact, but the start of a considerable counter trend phase is very likely. Prices have hit the first projection at 411 after a ‘flush-high’ (false breakout or whatever you like to call it) and are now seeking a new lower peak below the pivots at ~398. Holding below this level severely increases the chances of a correction back to the zone 353<>355 and 340 after that.
Due to the draw down risk and bearish odds, we suggest an exit-long and neutral position for the time being. Shorting is too risky since we are not calling for a new bear market, but merely a deep (and often choppy) corrective pattern. Keep in mind that such correction can easily take 2-3 months to fully pan out.
- Primary trend: positive
- Outlook: deep zig-zag correction
- Strategy: exit-long and avoid
- Support: 370 / 353 / 340-
- Resistance: 398 / 411* / 472*
- Outlook cancelled/neutralized: n/a
Weekly chart S&P GSCI Industrial Metals Index