Analysis of Stochastic Oscillator Indicator

A lot of commodity information can be gathered from the shapes and duration of the commodity market tops and bottoms of the stochastic oscillator commodities technical indicator.

The amount of time that the commodity instrument stays overbought or oversold is an important factor when analyzing the strength of the commodity market trends.

Commodities Trading Market Tops

Narrow commodity market top that doesn't reach very high above 80%

Narrow commodities trading market tops means that the bulls are weak, and that the commodity bears have overpowered the commodity bulls very quickly. This means that the commodity bears might push the commodities price further down without much resistance from the commodity bulls.

Very high, wide commodity market tops

Wide commodity market top mean that the commodity bulls are very powerful much more than the commodity bears and the ensuing short term commodity trend reversal (retracement), will be very short lived. The retracement on the stochastic oscillator commodity technical indicator will not even reach the over-sold areas before the stochastic oscillator commodity technical indicator moves back to the overbought areas.

Commodities Trading Market Bottoms

A narrow commodity market bottom that does not reach very deep below 20%

The narrow commodity market bottom means that commodity bears are weak in their attempt to push the commodities price down, the commodity bulls have gained control of the commodities price pretty fast so the commodities price movement upwards will continue for a while. And the upward commodity market commodity trend will continue for a while.

Very wide, deep commodity market bottoms

A wide commodity market bottoms is a sign that the commodity bears are very strong and the commodity sellers are in control of the commodities price, therefore any retracement upwards will not stay for long.