DBC , a strong soldier, watching how it preforms for now . First off I am not going to trade this yet because my rules allowing me to take swing trades require the market indexes be above their 10 and 21 ema's, at a minimum ( ideally above 50 sma too) . But that does not mean that I am not "waiting in the bushes", getting ready to pounce when my moment arrives eventually.
DBC is , in my opinion, a good way to gain general exposure in commodities. Although there is what seems to be a short term climatic top that recently occurred , I think that the inflationary pressures will probably be here to stay for 2022 and that the volume shows us what is most likely an earlier move here. Especially the lack of comparative selling volume these last few days .
Today we have a wedge drop and downside gap that puts us below the 10/21 emas and now is a good time to see what happens next . I am leaning towards a wedge pop with a close above the 10/21 emas soon . We might need to form a base before the next push up too but time will tell . Normally I would buy the wedge pop if it occurs but the market is in do not swing trade mode for me so I am only watching this one but it has shown good action lately and I think inflationary pressure is here to stay and that that could result in a longer term uptrend for commodities . Additionally , note how many sessions we respected the 10 period ema , Strength!
I want to add a bit on my process that helps me spot stuff like DBC and something to potentially consider personalizing for yourself:
So, even though I need one of the indexes to be above its daily 10 and 21 ema's to take swing trades . I can and do still keep an active day trading strategy going and one of the prerequisites that help me find day trading candidates is reliant on is 52 week highs. I am still working on the strategy's finer rules but developing a system like this really has helped me to keep the market in check. Even if its not actively trading due to conditions, you will wire into your thought process names and groups doing well so that when a probable market uptrend returns that suits your rules, you will probably already know potential leaders to scout with some confidence.
My day trading strategy is a trend trading system that needs stocks to be making new highs without losing the 200 ema after on 5 min chart AND the market index of your choice needs to be above the 200 ema ( on 5 min chart ) for at least 2 days. There's more too it but that fairly simple logic keeps you on the good side of the market more than not for short term sentiment . So far this year , it has small profit and positive expectancy and has made 65 trades so far in 2022 ( with MANY sit out days).
Anyways , very off topic but that is something that has helped me quite a bit to gain additional confidence in buying/monitoring strength and at the least is a good start to keeping you out when conditions are bad . There's no right or wrong way but something to think about , especially if you are reading this and do not have an existent rules based strategy to keep you out of the market and get you in ect ect .
Waiting in the bushes , the day to pounce will come :)
