I would like to update some charts for the commodities complex as we are starting to see some action in this sector. Back in the summer months when we first started to get long some of the different commodities sectors, we got many breakouts from some very nice H&S bases. After the initial move up came the first consolidation phase that has been going on for nearly four months or so. We are now starting to see some of these consolidation patterns breaking out which should lead to the next impulse move higher in most cases.

Let’s start with BHP, one of the biggest miners on the planet, that shows a good example of where we are at in the bull market. Today the price action broke out with a gap above the top rail of an almost 5-month triangle consolidation pattern. A backtest to the top rail would come in around the 43.50 area.

Now let’s look at a long-term weekly chart which shows some classic Chartology. We have discussed many times in the past when you see a small consolidation pattern form just below an important trendline, in this case, the neckline, and one above, that is usually a very bullish setup which BHP is now showing.

Also, keep in mind the size of that double H&S bottom that took three years to build out. Big patterns lead to big moves. The minimum price objective of that double H&S bottom is measured from the head straight up to the neckline # two. Add that distance to the breakout point to get your minimum price objective.

This monthly chart put the double H&S bottom in perspective.

Copper is an important commodity as it can show the strength or weakness of the economy which is why it’s called Dr. Copper. This weekly chart shows copper’s big H&S bottom with the breakout in the summer. The head formed a 7 point triangle reversal pattern which actually reversed the bear market. Here is a case where we didn’t see a backtest to the neckline when the breakout took place. The 30-week ema has done a good job of holding support so far during Coppers new bull market.