Dow Jones-UBS Commodity Index broke primary support at 136, signaling another down-swing. Target for the breakout is the 2012 low at 126. A peak below zero on 63-day Twiggs Momentum already warns of a primary down-trend.
* Target calculation: 136 – ( 144 – 136 ) = 128
A fall in commodities warns of slack global demand and a bearish outlook for stocks. The large divergence between DJ-UBS Commodity Index and the S&P 500 should be treated as a caution.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.