commodities high conviction entry in FebLooking back, commodities had a high conviction in february based on a longterm trend. Combining macd and BB break out.
Markets have either risk-on sentiment or defensive. During risk-on phase people want to put money to work, there is too much money. During risk-off or defensive, people want money and safety. Assets become too expensive. Bitcoin rallies during risk-on phases. Oil or gold can be either risk-on and risk-off . Markets are fascinating.
Faang can be a risk-on and risk-off, till everything becomes too expensive to have.
Markets leave clues. and they move on cycles.
It makes sense why commodities are risk-off . Small caps usually are risk-on (when economy does well, there are no global conflicts; ie the future is BRIGHT).
More concerns move the weight to risk-off , ie markets are a weighing machine longterm.
People tend to be stuck in one mood or another, and it's tough to adjust? markets can change gears quickly.
DJP
DJP holds TL or GANN support @37; FIBO levels dictate INFLATION!DJP, a commodities play, is an inflation hedge. If DJP breaks 37 voiding the Trendline or GANN FAN line support, then inflation may have peaked out temporarily.
Holding 37, DJP may see higher inflation numbers.\
Note that all impt FIBO levels are respected here in increments of 4.
37 is the 2.618 level of 31 to 27.
If 37 holds, the next resistance is at 41, the 3.618 & next higher high is 45 the 4.618 level.
If 37 breaks, the next support is 33, @1.618 FIBO.
Not trading advice
DXY watch - 11/26/2014Dollar faces double resistance with lost momentum. Meanwhile assets inversely correlated with dollar seem to be doing better.
If dollar is weakening in the next several months, these assets may be favorable. Conversely if dollar breaks out and continue to strengthen, these assets will be pressured even more. I will watch the red support lines closely.
Assets that performed well during first half of 2007 bear marketEnergy (VDE), material (VAW), commodities (DJP), inflation protection (TIP), gold (GLD) and bond (TLT).
I am not certain why (probably because of weaker dollar, as shown on the chart), given this, current dollar and rate on their monthly charts are indeed very weak so can these assets perform well during first half of next bear market? Only time can tell. Good Luck!