The PowerShares Deutsche Bank Commodity ETF (DBC) continues to consolidate in the 25.80-25.20 area, preparing for an upside breakout that should propel the commodity ETF towards my next target zone of 26.80-27.30. How can we have rally potential in the bond market at the same time the DBC appears to be breaking out of a major base formation? In an over-simplified explanation, my sense is that China’s demand for physical commodities by itself could support the market for a while, at the same time the sluggish U.S. is inspiring lower longer-term interest rates.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.