Commodities - Signs of turnaround?

Hi folks, everyone seem to think that commodities are going to be bullish with yesterday's big U-turn in most commodity names.

Funds have run out of excuses for getting the commodity bullish momentum going....so now the story is OPEC will defend the 85 price and they are playing on the room for future revenue growth story.

Here is my analysis:
1. The Dollar is still strong and the Euro is below the key level of 1.44, indicating that this currency is not yet turning around.

2. OIH is still in a bear trend, there is no indication from the stochastics of any long term uptrend.

Looking at the Sept and October options, there are no indications that OIH is going to go any higher than 160. Fund managers have at most 1 or 2 days to hike up the underlying stock price.

On the other hand there are more shorts in October.

3. Options expiry is due in 2 days, fund managers have a tendency to maximize their profits by stretching the price of the underlying stock to its limit.


Best strategy for the moment:
1. Watch for any breakouts of EURO (above 1.44).
2. Wait for two more days before going long on a pull back. Buy commodities only on dips....don't rush into a trade. The whole idea is to let the trend reveal itself.
3. Beware of the possibility of sideways trading in a tight range.
4. Short commodities only if you see the curve rollover.
5. I think there is one more day for some minor gains for commodities, before it consolidates. It is cheaper to short commodities once it has reached the top.