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The Morning Cup of Jo


You know what happens when you assume!


Trademark Pending

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).

WONDA Copyright 2004 William O'Neil + Co., Inc. All rights reserved

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.

WONDA Copyright 2004 William O'Neil + Co., Inc. All rights reserved

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.

WONDA Copyright 2004 William O'Neil + Co., Inc. All rights reserved

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.

WONDA Copyright 2004 William O'Neil + Co., Inc. All rights reserved

Until next time...


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