The Morning Cup of Jo
You know what happens when you assume!
Yesterday morning Toddo and I were talking about the CRB Index and what it looks like technically. Since we've been so busy over the last couple of days with the movements in the equity markets, I felt this might be an opportune time to switch gears and take a look at the commodity market and the dollar.
The ST graph of the CRB Index is currently showing a little dandruff. I believe a neckline break could drop the index down to its 200 DMA (the black line just below 260).
Looking a little further out, there is another longer-term possibility. It is plausible the CRB Index could retest the topside of the uber LT downward trend break and double bottom with handle pattern.
Coincidently, on Monday the Dollar broke above its recent consolidation and 200 DMA. At the moment it looks as if the next resistance point (Floors & Ceilings)will be around 94-95. There is a gap back on September 19th of last year (which you can't see on this line graph) it could make a run at.
All of this leads me to the final graph. I was recently asked a question about the relation between the Dollar and CRB index and if they always act inversely. No, that's not the case. I have found 3 instances, over the last 18-years, for where for a period of time they acted in unison. Therefore, don't assume just because the dollar is increasing, the CRB index will decrease, even though it does play a role.
Until next time...
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