Time for Commodities to Bounce?

Stocks and other investment instruments often retrace a big portion of their bullish or bearish moves to test support/resistance before continuing the trend. A common place for these retests are at Fibonacci levels. You can read more about Fibonacci retracments HERE.

I bring this up because the CRB index, which tracks a basket of commodities, is at its 61.8% Fib retracement right now on a weekly chart, if you're looking at its advance since August 2004. If it were going to bounce, this would be a likely place...
The problem with Fib retracements, of course is picking your starting point. This is only one of several possible Fib retracements I could draw on the CRB. But this, combined with the fact that gold and silver are hitting and holding important support, tells me that we could see a bounce in commodities next week.

This doesn't mean all commodities will bounce next week -- but most of them should, and I expect gold and silver to lead the way. Another timing system that I won't get into predicts a change in trend on or around September 22. Maybe we'll see the real bounce Thursday or Friday, if that bit of hoodoo holds true.

The fact is, commodities are oversold, and it wouldn't be surprising to see them bounce here anyway.

Check out my new gold and energy blog at MoneyAndMarkets.com