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January 2017 Editors Comments

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Physical Commodities

Are we at a generational inflection point?  Consider the following:

(1)  Is commodity inflation percolating?  The CRB Index ($CRB
at stockcharts.com) hit a multi-year low at 155 in February
2016, rose to 196 in June, and has since meandered sideways.  But
it has done so by crawling along the top of the 50-week moving average
(wma), which is now trying to curl upward.  The close on November
30 (189.31) was just below a potentially significant breakout point
(191.35) that could open the way to the 200-wma near 240 about
25% higher!  The Index is above the 50-day ma above the 200-day ma.

(2)  Did bonds make a multi-year top in July?  If so, that
would end a 35-year bull market?  If so, where will that money go?.

(3)  Are stocks making a multi-year high now?  Was the runup
after Trump's election a breakout or a blowoff?  If so, where will
that money go?

Crude oil ran up about $6.50/barrel in just 2 days.  Energy price
sensitivity?

And what about the US dollar?  Was that a breakout from  an almost
two-year consolidation pattern or a bull trap?

One might want to be ready to ...

Trade 'em,

Jerry Toepke


Last Updated on Sunday, 04 December 2016 11:08
 

December 2016 Editors Comments

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Traders want volatility?  They may get volatility!

Crude oil down more than $2 one day then gasoline (temporarily)
up more than 21.00 centsthe next.  Gold does nothing but hug its 200-day
moving average for the last 3 weeks of October then up $30 in
3 days.  The US$ drops 0.80 on the first day of November, the same
day OJ closed up 10.00 cents and soybeans down 20.00 cents.  Fats
and feeders trade limits a few times.

Instability?  Election uncertainty?

Or is something changing?  From deflationary fears toward at least
modest inflation?  China resurgent or ready for a credit crash?  India?  The
November 1 PMI for both countries was higher than anticipated.

The venerable CRB Index made a multi-year low in early 2016, rallied
into June, and has since traded sideways.  The 50-dma is above the
200-dma, with the index testing the 50-dma from above.  The weekly
index is crawling along the top of the 50-week ma.

Now what?  Even in normnal years, the US dollar has tended
to decline through year end.  Will the current environment exaggerate
that?  Even if not, how will markets react?  Are the precious metals
preparing to run again?  What about the stock market?  And bonds?

Perhaps we should be ready to ...

Trade 'em,

Jerry Toepke
 

November 2016 Editors Comments

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Is consolidation almost over?

After establishing a multi-year low in January/February this year (154.85 and 154,89), the venerable CRB Index (go to stockcharts.com, click on Free Charts, then type $CRB into the box for Create a Sharp Chart) rose to a high of 195.88 in June, fell to 176.,67 in August, and has since been coiling as it works around its 50-day and 200-day moving averages (ma). Prices and the two moving averages are in bullish alignment, with the closing price for September at 186.32, the 50-dma at 182.98, and the 200-dma at 177.95.

Metals are typically strong during the fourth quarter, with gold and gold jewelry normally in great demand from India, the West, and China for festivals, holidays, and celebrations. But platinum normally outperforms gold, silver follows into the new year, and copper is in accumulation for the next construction season. Corn and soybeans typically enjoy a post-harvest rally to one degree of another, sometimes through the remainder of the year. Wheat suffers.
Energies are usually strong during October but then falter into December. Meats are mixed, softs are mixed. But winter is coming, during which anything can happen. And the US dollar?

Perhaps we should be ready to ...

Trade 'em,

Jerry Toepke

Last Updated on Friday, 07 October 2016 07:53
 

October 2016 Editors Comments

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Physical Commodities....

Whoa!  Is this a correction and consolidation?

After a double bottom in January/February (154.85-154.89) 7 years from the last major low in December 2008, the CRB Index (stockcharts.com, Free Charts, type in $CRB) rose to a high in June of 195.88.  In doing so, it rose above the 50-dma and pulled that above the 200-dma the so-called Golden Cross.

Since then, however, the CRB declined by early August to 176.67.  But that retracement of not even 50% was a retest of the 200-dma (and 50-week ma).  It held, and rose to 189.57, which was above the 50-dma again.

Now it declined again.  But despite all the bearish sentiment and selling in grains, energies, and metals, the Index ended the month of August still above 180.

Will it hold and recover, perhaps setting up a trading range, a consolidationl?  What could drive a rebound?  Normally, corn and soybeans decline during September as harvest approaches?  Are they already oversold?  What about crude oil?  Was -$1.60/bbl on the last day of August justified?

And, of course, what will the US dollar do - and whatever that may be, how will commodities react?  Where will money go if/when the stock and/or bond markets pop their bubbles?

Perhaps we should be ready to ...

Trade 'em,

Jerry Toepke

P.S. Hot off the press - MRCI's 2016 Historical Forex Report!!

218 pages of seasonal analysis for Australian, Canadian, and New Zealand dollars, British pounds, Japanese yen, Mexicah pesos, Eurocurrencies, and US dollar index; seasonal patterns and weekly charts for each contract of each currency and for spreads between; includes 236 total seasonal strategies for year round trading ideas - 78 seasonal and 158 spreads.

Last Updated on Thursday, 01 September 2016 09:06
 

September 2016 Editors Comments

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Physical Commodities

A really mixed bag.  Grains and the soy complex still falling, energies
still plunging.  Metals strong, softs and meats mixed.

At the end of July, grains and soybeans were trying to stabilize.  The
same with energies.  Precious metals and even copper rallied.  Meats
still struggled.

The CRB Index (stockcharts.com, click on Free Charts,
then type $CRB the appropriate box) fell
persistently during the last half of July until the last day.  Having
returned from above the higher 50-day moving average (dma) to the
lower 200 dma, Index bounced sharply in an outside day.  On
the weekly chart, it had returned to the 50-week moving average
and left a tail.

On the first day of August (as this is being written), corn and soybeans
plunged again, as did crude oil.  Softs were mixed agaim but cattle
closed almost limit up.  The daily RSI and MACD are both at or near
readings
considered oversold.  Weekly indicators are neutral.

Now what?  Soybeans typically rally modestly from early August.  Gold
normally makes a seasonal low.  The energy complex tends to rally
during at least the latter half of the month.  September is a shoulder
month for energies and harvest begins for sorn and soy...

... but perhaps we should be ready to ...



Trade 'em,



Jerry Toepke


 
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