The daily bar chart for the Continuous Commodity Index (CCI) is still in solid price uptrend and just recently hit a fresh 30-plus year high. The CCI is a basket of major raw commodity futures prices rolled into one composite price index. The CCI is also an excellent barometer of the general price trend of the raw commodity market sector. However, recent price action in the CCI has also produced a potentially bearish rising wedge pattern on the daily bar chart. While the CCI is still in an overall bullish technical posture, as both the longer-term and shorter-term trends are decidedly up, the index is also due for a significant downside “correction” in the uptrend soon.
click on the chart to enlarge
The potentially bearish rising wedge could be the early warning signal for that expected downside correction in an uptrend in the CCI. Any big downside correction in the CCI would also likely coincide with a market top in crude oil futures. Interestingly, just Monday there were at least two noted market watchers that publicly predicted the crude oil market has put in a top. Stay tuned!
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