In January 2014, physical commodities personified by the CRB Index
made a small double bottom at 272 (with one in November at 272) which
was also a higher double bottom with an even more significant one
in June 2012 at 267. The Index then rallied hard into March/April
before struggling to reach 313 in June 2014.
And then the US dollar took off. The US$ Index found reinforced support
at 79.77 and set off on a so-far 13-week march higher that reached
86.33 on the last day of the third quarter and US fiscal year. That
8.2% rise in the US$ drove commodities back down into the last full
week of September to below 277 an 11% decline.
Most commentators, many perhaps looking at other commodity indices
composed or weighted differently, saw commodities as being in a new
And certainly they were during the third quarter. Grains and soybeans
fell apart under the weight of not only the dollar but also enormous
crops. Silver made new lows on the last day of the quarter as crude
oil plunged over $3/bbl.
But, prior to the last day of September, the CRB
We had better prepare to......