Commodity prices- is the high inoh boy! The correction is underway. wonder if 180 mark will be breached, main point is 157 mark needs to hold for the bull to resume!
TRJEFFCRB trade ideas
Commodity ETF Breakout! Long CommoditiesThis commodity index has broken multiple downtrends and is now taking out the horizontal resistance that goes back over 20 years! Explosive moves ahead. The MACD contains bullish divergence while the RSI hasn't been this high since 2011!
Does the commodity bull run continue? After the crash in March 2020 we see a huge increase in the commodity market which is even outpacing the XLK ETF (tracks the technology sector) since September 2020. But is this just a transitory phenomenon or are we just at the beginning of a huge bull run in the commodity sector? When we look at the chart of the CRB-index we can see that we have a clear resistance/support-area at around 200$. Also, the downtrend line was broken in April 2021 (which is intact since 2008) and if the price closes above 200$ the downtrend would not be valid anymore. The MACD is supporting the shift in trend by indicating a positive divergence.
When we look at the fundamentals the chances of a further decreasing value of the dollar due to the broadening money supply are high which would be another tailwind for the commodity sector as the Dollar shows a significant inverse correlation with the commodity market.
Therefore, the probability of a bull run in the commodity sector is high.
CRB Index's Linear Quarterly ChartCRB Index has same angle of ascent as 2001-06 run.
275$ target before drop in mid-cycle low.
#commodities
Head & Shoulders pattern on Commodities indexH&S pattern, with target on the upper resistance. We could expect a 16% rise according to this chart.
$spy $crb $xle $oih If commodities super cycle This is how I think it plays out. Looking to buy energy on any significant pullback
S&P 500 versus CommoditiesOne should sell the stock market / commodity market spread, looks like a pretty safe bet. The dot.com bubble burst in 2020, when will the current stock market bubble burst and / or commodities rise via inflation?
Will they be another recovery inbound Com dolls currenciesOver the past year we have seen ComDoll currencies have seen massive gain's over the last 6 months as we have seen the price of goods based on the US dollars go up as oil has been one of the only com's that have gone nowhere near flat. Recently, we have seen the Core Commodity Index stall out leading to smaller volatility in the face of a possible realization of a recovery during the summer of 2020. With the actualization of Covid-19 resurgence and lock downs whats the outlook in terms of commodity currencies?
I would like to believe that looking at how the Core Commodity Index and USD will give us hits on where the ComDolls go. At the moment Oct 1 2020 , over the last 4 trading days we have seen the dollar drop 1.18% and the CCI level out at a 2 month low. Over the next few weeks the blow that was received to markets around the world in Feb wont be seen instead, I believe that we will see a 2nd " Recover stage" like what was seen after the CB announced all the tools they had to sstableize the economy.
Well, we have come to the same issues and point that we were in 10 months ago with shutdowns crippling the economy the only difference is we know what to expect from the CB whatever they did in the past + more hence all the talk about a +2% inflation rate. What does that mean Currencies will get cheap across the world and real thing will become more expensive. As consumer currencies are sold to ever low levels.
Hence my out look on the CCI is bullish and intern I am bullish currencies that are tied to base goods.
The myth of hyperinflation series #7- Supply & productionLet's keep it simple.
Increase in raw material & production cost-> Decrease in aggregate supply (Suppliers drop out as profit deteriorates)-> Decrease in total production->. If demand remains the same (most likely going to be the case unless there is another stimulus check coming in), then remaining producers/suppliers who now have more pricing power can and have to pass down the cost to consumers-> Potential supply-induced inflation happens as the same number of buyers chase after the shrinking pool of goods.
However, the chart shows no such risk. As the consumption picks up, supplier/producer starts to hire more people (Manufacturing employment) and ramp up the production lvl (Manufacturing production). The increasing demand is matched by the increasing production (manufacturing production keeps up with the demand of the new order) and declining inventory (Manufacturing inventory). In other words, even though oil price and raw material cost rose (still below the historical standard), we didn't see any decrease in aggregate supply . Of course, I have simplified the matte and left out many details, but I think the only issue we have to worry about that can cause the imbalance between aggregate supply and demand is the potential supplier delivery difficulties being mentioned in the ISM report.
In general, supply is elastic, meaning that the producer/supplier usually rush to increase the production/capacity as the price of good and demand go up because capital has been abundant ever since China joined WTO and the interest rate has been suppressed to such a low lvl ever since sub-prime mortgage crisis. The whole world is on the disinflationary trend as we live in a world of excess savings and insufficient demand because developing countries constantly export their savings to developed countries and because the disposable income doesn't keep up with the inflation.
Such over-capacity/overproduction & over-abundance of capital and good will keep the price lvl low & affordable and the inflation lvl manageable, especially in the disinflationary environment in which there is a moderate amount of consumer demand.
Next, I will talk about some of the external factors and circumstances that could influence the possibility of hyperinflation.
CRB bulls rejected at triple resistance cluster (2)In relation to equal weight, Smart Money Hedgers are holding record Short exposure on the CRB commodity index. Historically, when Smart Money Hedgers have had this type of exposure (short contracts totalling more than 100,000) as it is now, the CRB index declined every time over the medium to long term.
Keep an eye on the weekly bearish engulfing candle. Providing we hold below key triple resistance at 2 (61.8 Fib, Channel & 50 period weekly moving average) we should be on track to short this index for further downside gains.
As with most Smart Money trades, it typically pays to monitor the trade first on a daily/weekly time frame before entering into a position, as they can take time to play out. This bearish outlook is for the medium to long term.
Commodity Reaserch Bureau (CRB) IndexExpected increase in price of commodities for this year.
Remember that in this index, each asset has different a weight and includes 19 commodities. According to Investopedia:
39% allocated to energy contracts
41% to agriculture
7% to precious metals
13% to industrial metals
Related indices:
SPGSCI: S&P Goldman & Sachs Commodity Index
BCOM: Bloomberg Commodity Index
Hyper inflation might be on the way fastMight want to convert your savings into gold and silver. End of the day paper is just paper. Have faith in it for what? Correct me if I'm wrong.
Commodities Uptrend Incoming? | CRB Commodity Index ($TRJEFFCRB)✨ Drop a comment asking for an update, we do NEW setups every day! ✨
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Commodities have rallied into resistance. We are currently looking for a pullback to the last support range. To chart this we are looking at the Thomson Reuters/CoreCommodity CRB Commodity Index (TRJEFFCRB), which is an index comprised of 19 commodities: aluminum, cocoa, coffee, copper, corn, cotton, crude oil, gold, heating oil, Lean Hogs, live cattle, natural gas, nickel, orange juice, silver, soybeans, sugar, unleaded gas, and wheat.
For those who want to trade the price action, one could take a position with Commodities ETFs like Invesco DB Commodity Tracking (DBC) and First Trust Global Tactical Commodity Strat ETF (FTGC). With that said, we aren't trading this one, we are just looking at levels.
Although the trend is still bearish overall, it is interesting to see commodities trending up to resistance as money is being created by central banks. It is a longstanding economic theory that inflation should cause an increase in the price of commoidites, and that commodity price increases are a leading indicator of inflation.
While the correlation between commodities and money printing hasn't been noticeable in recent years, COVID-19 has changed things up a bit and it'll be interesting to see if old trends repeat or new trends emerge (consider things like recent meat processing issues increasing the cost of meat, and the recent temporary drop in the price of oil to zero).
Although the trend is currently bearish, we are only looking levels of interest. We see two relevant support levels, S1 and S2. S1 would be of particular interest if commodities were going to officially start trending up. If we do get more upside, R1 and R2 are both levels to watch. R2 specifically represents the bottom of the previous range before COVID, and seems like a logical target in an uptrend.
To sum it all up, tracking commodities can help us to make profitable trades, either on specific commodities or baskets of commodities via ETFs like the ones noted above, but it is also academically interesting.
Could a spike in commodities prices now signal coming inflation from an increase of the money supply? Should we be filling our freezer with OJ and beef to avoid higher prices in the near future? Or, should we just be looking for bullish continuation or bearish consolidation to help us find a nice setup on oil, coffee, and gold?
Resource: mises.org + www.investopedia.com
US Dollar Index FuturesGiven the dismantling in commodities, a new high for the US dollar index is still in the cards..
Depression leading indicator via Commodities index breakdown?Last week's gravestone Doji candle is potentially showing a breakdown of the TR commodities index. And as Chris Kimble pointed out in bit.ly/2RDMcgd - this could spell depression. A depression signals a low demand for commodities, except for precious metals.
Commodities Double Bottom?Looking at Commodities via the Thomson Reuters/CoreCommodity CRB Index (TRJEFFCRB), an index that tracks 19 commodities including coca, coffee, copper, corn, gold, orange juice, soybeans, unleaded gas, wheat, etc, to see if the 1999 bottom will continue to hold as support today.
We can see price has currently found support on the bullish order block formed back in 1999, rebounding off that block and creating what could turn out to be a double bottom.
The trend is bearish, as confirmed by our Range MA indicator, and our Bull/Bear Power indicator even signaled a downtrend via a red arrow at almost the perfect local top on Jan 6, 2020.
Right now the question is should we be looking for a reversal of the bearish trend and close short positions (for example puts on commodities ETFs that are reflective of this index)?
To get confirmation of a reversal of the bearish trend, we will be looking for a long signal from the Bull/Bear power indicator as would be represented by a green arrow on the chart.
