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Moore Research Center, Inc.

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March 2014 Editor Comments

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Dow Jones-UBS Commentary

Is the Dow Jones-UBS Commodity Index building a new base?

(Follow this Index at http://stockcharts.com; click on Free Charts, type into the box that appears under Create a SharpChart the symbol $DJAIG.)

It appears to have settled into a narrow sideways range, having spent the last 3+ months boxed by 128 and 122.  Closing January at 126.12, it lies above its 50-day moving average at 125.40 but below its 200-day at 127.85.  Daily MACD and 14-day RSI are neutral.  Weekly indicators are slowly rising, having already displayed bullish convergences at the November low.

What are its seasonal and fundamental prospects?  Energies tend to rise from March/April as gasoline and heating oil supplies are accumulated or replenished.  Natural gas supplies also are at their nadir then.  Will there be another cold snap before winter ends?

Winter wheat is dormant, and corn and soybeans are yet to be planted.  Could California's drought be ominous?  Gold and silver tend to trade sideways/lower through spring.  Are they also building a sideways base?

If the stock market cracks, might some of that money move back into hard assets?  Will the Fed's tapering work or create chaos?  What will the US dollar do?  There is enough uncertainty to....

Trade 'em,

Jerry Toepke



Last Updated on Tuesday, 04 February 2014 07:10
 

February 2014 Editor Comments

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Dow Jones-UBS Commentary

As reflected in the Dow Jones-UBS Commodity Index, physical commodities have suffered a miserable 2+ years.  Ever since mid 2011, by which time this index had retraced about half its 2008-09 plunge in reaching 175, the DJ-UBS has steadily eroded.

(Follow this Index at stockcharts.com; click on Free Charts, type into the box that appears under Create a SharpChart the symbol $DJAIG.)

By November 2013, the index had fallen back to 122 not far above its 2009 low of about 102 (after falling from its 2008 high of almost 240 itself a triple of its 1999 low).  Now, if one is really bearish, one can see a head-and-shoulders continuation pattern with the head at 175 and the neckline at about 122 which would suggest a measured objective would be about 69.  Practical?  That would be a new 30+-year low.  One would need to be an ultra-uber-bear.

In contrast, perhaps the index is making a higher bottom.  Once can draw tight fan and downtrend lines to see that not much would be required to break the downtrend.  In fact, one could argue that all trading of this last 16 months has been sliding down the top of a broken downtrend line.  Given the enormous supply of money created in the last couple years, if the velocity of money began to rise, it would be crucial
to be ready to...

Trade 'em,

Jerry Toepke

 P.S. MRCI publishes new volumes in its series of special reports each year.  Hottest off the press.... 2014 Historical Lumber: a 60-page volume of seasonal analysis for lumber futures, with seasonal patterns for each delivery and several spreads; with 22 seasonal and spread strategies for year-round ideas.
Last Updated on Saturday, 04 January 2014 07:27
 

January 2014 Editor Comments

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Dow Jones-UBS Commentary

Readers may notice the new heading immediately above.  It no longer says "CRBside Commentary" due to the unfortunate demise of the much revered CRB Index.

On page 74, however, you will now find the Dow Jones-UBS Commodity Index, with brief comments explaining the goal of its design; a list of its components and weightings for each sector; weekly/monthly charts.

This index is reweighted and rebalanced annually.  You may note differences between the old CRB and this DJ-UBS index.  For example, Energy comprises 36.69% of the index in contrast to only 17.65% of the old CRB.  Commodities such as orange juice, cocoa, and platinum are not members of the DJ-UBS but Brent Crude Oil, gasoline, Kansas wheat, zinc, aluminum, and nickel are.

Turning to charts, this Index meandered sideways until the turn of the century and then broke upwards.  Reaching its all-time high at nearly 240, it plunged into early 2009 to almost 100 back to its breakout level and slicing almost 60% of its value.  Despite recovering half way back up to about 175, it is now declining again.

A pure chartist might notice that it has now formed and broken down from a head-and-shoulders.  If so, the price objective would be about 75 approximately the lows from 1985-1999.  Is that possible?

It is crucial to be ready to......

Trade 'em,

Jerry Toepke


Last Updated on Thursday, 05 December 2013 12:32
 

December 2013 Editor Comments

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CRBside Commentary

"Ugh!"

The old CRB Index (a chart of which can be found at "stockcharts.com" by going to Free Charts and entering $CCI in the box) spent the first half of October trading sideways above and below its 50-day moving average.  But unable to decisively hold and exceed it, the Index dumped in the last days of the month and into early November.  In fact, by November 4, it had fallen all the way back to 504.

The primary culprits?  Seasonal weakness in the grains and oilseed complex as corn, cotton, and soybeans were harvested did not help but was to be expected.  However, un-seasonal weakness in precious metals has continued to pull the Index lower.

Again, the CRB made its all-time high in 2011 at 688 before falling to about 504 in May/June 2012.  After recovering to almost 600 in September 2012, it then began trending lower in orderly fashion, reaching 500 in June 2013.  After a modest recovery to about 528 in August, it has since weakened and is again approaching the critical 500 level.

Will it hold?  Will it flush?  Or will it finally break down?

It may now be more crucial than ever ...

... to be ready to


Trade 'em,


Jerry Toepke



Last Updated on Wednesday, 06 November 2013 13:14
 

November 2013 Editor Comments

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CRBside Commentary


Is the jury still out?  Again, the CRB Index (which can still be found at stockcharts.com by clicking on "free charts" and then typing in $CCI) made its all-time high in 2011 near 688 and then fell into mid 2012 to as low as 504.  After recovering to 598 in just a few months, it began trending lower again reaching a new low at 500 only 13 months after posting its earlier low.

But rather than collapse, it instead bounced albeit only to about 525.  Since then, it has moved to retest and fluctuate around its 50-day moving average.

Now what?  There has been little inflation psychology; but by early October the US dollar was below 80 and poised to test its low for the year (78.91).  Would dollar weakness be inflationary?  Metals appear to be holding.  The fourth quarter is normally a strong time of year for them, although there is no upside momentum yet.  Corn and soybean harvest is late, with large supplies already much anticipated.  Energies have already run higher, but winter is approaching.

There has yet to be a catalyst.  But if one appears, we need to be ready to....


Trade 'em,


Jerry Toepke


Last Updated on Wednesday, 02 October 2013 09:03
 


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