Commodities Message To The World Is…
Commodity Bulls were easy to find in April of 2011, as 70% of investors felt like Commodities were the place to be. Since then Commodity ETF DBC is down 20%. Did it pay to follow the crowd or go against it in 2011?
Investors feel a little bit different about Commodities at this time, as bullish sentiment at (3) currently stands at 30% bulls.
Crude Oil (upper left chart) is testing a 5-year support line and the Thompson Reuters Commodity Index (upper right chart) is testing a 4-year support line at the same time.
It paid to go against the crowd in April of 2011, will it pay to go against the crowd now at (3)?
Interest rates have been falling this year, as bond traders have not been concerned about too much global inflation or growth, as the yield on the 10 & 30-year bond continue to fall this year. Are bonds telling us the truth about global inflation or lack of?
Joe Friday…From a global macro growth point of view, it would appear very important that commodities hold at these support lines!
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King Dollar Is Nearing 11-Year Resistance, Sentiment Getting Lofty!
The U.S. Dollar has experienced a small rally over the past couple of months (up 3%), taking it back to falling resistance line (1) that has been in place for the past 11-years.
This small rally has created a shift in bullish sentiment towards the U.S. Dollar. The lower inset chart reflects bulls were hard to find a couple of months ago and now its a little easier to find them.
Sentiment is nearing levels where the Dollar peaked over the past few years as it is nearing this key resistance line.
Can King Dollar break this 11-year resistance line, will it be different this time?
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Head & Shoulders Topping Pattern Taking Place In Beef Prices?
Unless you live under a rock, you are well aware that beef prices are much higher at the store. Feeder cattle prices are up 25% in just the past four months!
Could a head & shoulders topping pattern be forming in the cattle market? Possible!
If this pattern read is correct, the neckline is being tested right now. To prove this pattern, the neckline needs to fail as support. Should the neckline fail as support, beef prices should end up being lower in time!
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Commodities-Time To Catch A Falling Knife?
Commodities ETF DBC has been a little soft over the past seven weeks, losing around 7% in price (-2% YTD), while the S&P 500 has been flat (lower chart).
The top chart is the TR Continuous Index, which finds itself testing dual support, one of them being a 14-year rising support line.
This index has been soft for the past four years, while the stock market has continued to rally. In the big picture, what happens here could be very important for commodities overall direction in the months to come.
Some believe in the idea of buying low and selling higher. Is now the time to “Catch A Falling Commodities Index???”