When people think of the commodity markets, they tend to visualize frantic trading with quick turns and rapid reversals from down to up and so forth.
Remember the movie Trading Places? While supply shocks can and do happen, sometimes seemingly overnight, demand shifts can take a long time to evolve, understandably.
The price of BHP Billiton (BHP), chart above, has more than halved in the past year. Prices have shown some improvement from a January low, but BHP is still below its declining 200-day average line.
The On-Balance-Volume (OBV) line has had only limited improvement, telling us that new accumulation is not yet underway.
This longer-term chart of BHP, above, is not giving off bullish signals. Prices are below the declining 40-week moving average line, so the major trend is still down. The OBV line is pretty neutral and the Moving Average Convergence Divergence (MACD) oscillator only generated a cover shorts signal.
A trading range bounded by $20 and $30 would be the most likely course of events for BHP in the weeks ahead.