The future of commodities
Updated
I have stated in previous ideas that stonks vs commodities are gonna lose big time. And this is more clearly observed comparing the main indices with something of value (like silver) to compare this century with the last one. Silver is used because gold used to have a relationship with USD.
Now we normalize RB1! by multiplying it with DXY. This calculates the effective value of the commodity. Because RB1! is measured in gallons/dollar, we have to take USD out of the equation. And that, because of the explosive nature DXY showed the last year. A rising dollar will lower a value calculated with it. So as you can see, this year's RB1! growth is actually much larger, because dollar was also very strong.
RB1! didn't seem to follow long-term fibonacci measured on it's own. With DXY in the equation, it is MUCH simpler and more predictive.
The retraction from the top of 1990, to the bottom of 98, sets the stage for the long-term resistances of 1.272, 2 and 2.414. And price always reacted to it accordingly.
Also from the top of 2008, to the bottom of 2020, define EXACTLY the peak we reached this summer, the 1.272 extension.
The path the price will follow is drawn in a similar fashion to how price behaved in 1998-2008. Low prices are expected for the following years because of the probable bubble-burst that already took place. And prices to skyrocket in the following years, because production will greatly lower since the masses will consume electricity (or be forbidden from it as well - this is a long conversation which doesn't belong here), and diesel/gasoline fuel will remain for industrial use.
Gasoline price DEFINES the buying strength of the consumer. It is crucial that its extremes are compared by normalizing it with the strength of currency. Most consumers have predictive/specific wages which lose/gain purchase value according to what dollar does, so it is vital to normalize prices. I advice you all to not analyze price on it's own. And for SPX and commodities it is highly encouraged that you change the way you perceive price, because dollar's nature has completely changed and is blurring the picture.
PS. Maybe normalizing them with DXY is wrong, the chart however shows some very accurate long-term-movement, that precisely respects the retracements.
Tread lightly, for this is hallowed ground.
-Father Grigori
Now we normalize RB1! by multiplying it with DXY. This calculates the effective value of the commodity. Because RB1! is measured in gallons/dollar, we have to take USD out of the equation. And that, because of the explosive nature DXY showed the last year. A rising dollar will lower a value calculated with it. So as you can see, this year's RB1! growth is actually much larger, because dollar was also very strong.
RB1! didn't seem to follow long-term fibonacci measured on it's own. With DXY in the equation, it is MUCH simpler and more predictive.
The retraction from the top of 1990, to the bottom of 98, sets the stage for the long-term resistances of 1.272, 2 and 2.414. And price always reacted to it accordingly.
Also from the top of 2008, to the bottom of 2020, define EXACTLY the peak we reached this summer, the 1.272 extension.
The path the price will follow is drawn in a similar fashion to how price behaved in 1998-2008. Low prices are expected for the following years because of the probable bubble-burst that already took place. And prices to skyrocket in the following years, because production will greatly lower since the masses will consume electricity (or be forbidden from it as well - this is a long conversation which doesn't belong here), and diesel/gasoline fuel will remain for industrial use.
Gasoline price DEFINES the buying strength of the consumer. It is crucial that its extremes are compared by normalizing it with the strength of currency. Most consumers have predictive/specific wages which lose/gain purchase value according to what dollar does, so it is vital to normalize prices. I advice you all to not analyze price on it's own. And for SPX and commodities it is highly encouraged that you change the way you perceive price, because dollar's nature has completely changed and is blurring the picture.
PS. Maybe normalizing them with DXY is wrong, the chart however shows some very accurate long-term-movement, that precisely respects the retracements.
Tread lightly, for this is hallowed ground.
-Father Grigori
Note
The importance of normalization:Note
Diesel FuelNote
How didn't I see this before?Note
Interesting USOIL chart...
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