February 2019 Editors Comments

Wednesday, 02 January 2019 15:52 Melissa Moore

CRB & Physical Commodities

Conventional wisdom says the Chinese economy is and will continue slowing, decreasing demand for commodities in general and depressing their prices.  Is that why the CRB Index had such a bearish December?

After making its most recent high at 200.04 in early October, the CRB fell again through much of December, making a low on Christmas Eve at 168.21 just above its June 2017 low at 166.48.  After a powerful surge on the day after Christmas up to 173.15, it spent the remainder of 2018 between those two levels.

But if daily and weekly indicators were oversold before, they are grossly oversold now.  The 50-dma is below the 200-dma, but 50-week is above the 200-week.

Gold, grains, and precious metals were all higher on the first day of 2019.  Does that also suggest it is overdone?  The market will find out more when USDA reports are released January 11, but it has been suggested that US winter wheat acreage could be the lowest in 100 years.  Precious metals may have begun a trend higher.  Silver, for example, appears to have broken out of a multi-month low.  Has crude oil put in a low?  Was that natural gas rally in December just a fluke - or a harbinger?

Maybe we better be ready to ...

Trade 'em,

Jerry Toepke

Last Updated on Wednesday, 02 January 2019 15:54