The CRB Commodities index is headed for a test of the 2010 low of 250. A 63-day Twiggs Momentum peak below zero warns of a strong primary down-trend. Divergence from the S&P 500 index warns that stocks are likely to fall, following commodities down — at least to their 2011 lows.
* Target calculation: 290 – ( 330 – 290 ) = 250
The CRB Commodities Index is headed for a test of the 2010 low of 250 after breaking primary support at 295. The trough below zero on 63-day Twiggs Momentum indicates a strong primary down-trend. Divergence between the S&P 500 Index and commodities warns that stocks are over-priced and likely to follow.
* Target calculation: 295 – ( 325 – 295 ) = 265
The CRB Commodities Index broke support at 295, warning of another primary decline. Respect of zero by 63-day Twiggs Momentum strengthens the signal. Divergence between the S&P 500 Index and commodities warns that stocks are over-priced and likely to fall.
* Target calculation: 295 – ( 325 – 295 ) = 265
Weakening commodity prices are dragging the Australian Dollar lower against the greenback. Breach of support at $1.02 indicates another test of primary support at $0.96. Reversal of 63-day Twiggs Momentum below zero already warns of a primary down-trend. Failure of primary support at $0.96 would confirm, offering a long-term target of $0.84*.
* Target calculation: 0.96 – ( 1.08 – 0.96 ) = 0.84
Canada’s Loonie is strengthening against the Australian Dollar, having penetrated its long-term descending trendline and with 63-day Twiggs Momentum recovering above zero. Breakout above parity would signal the start of a primary up-trend.
The Loonie retreated against the greenback, testing support at $0.995 after a false break above $1.01. Failure of support would confirm a bull trap and test primary support at $0.95. Recovery above $1.01 remains as likely, however, and would signal a primary advance; respect of zero by 63-day Twiggs Momentum would strengthen the signal.
* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06
The Aussie found support at R7.90 against the South African Rand. 63-Day Twiggs Momentum remains weak and reversal below zero would indicate a primary down-trend. Failure of support at R7.90 would warn of a correction to R7.50*. Recovery above R8.30, however, would signal a fresh primary advance.
* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50
Both Brent Crude and Nymex Light Crude are falling, with signs that the global economy is slowing and that tensions with Iran are easing. Brent is close to the 61.8% Fibonacci retracement level and a fall below $110/barrel would test primary support at $100. Reversal of 63-day Twiggs Momentum below zero would warn of a primary down-trend — and confirm a European recession. Recovery above $115 remains as likely, however, and would suggest a new primary advance.
Nymex WTI Light Crude has already penetrated its rising trendline and support at $103/barrel. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal. Failure of support at $96 would confirm a primary down-trend — and warn of US recession.
The CRB Commodities Index is testing primary support at 295 and respect of the zero line (from below) by 63-day Twiggs Momentum warns of another primary decline. Target for a breakout would be 265*. Divergence between commodities and the S&P 500 suggests that stocks are over-priced, with the Fed doing its best to depress bond yields and pump up stock prices ahead of the November election.
* Target calculation: 295 – ( 325 – 295 ) = 265
The Australian dollar has tracked the CRB Commodities Index fairly closely since 2009. Weakening commodity prices warn that the Aussie is likely to follow.
Against the US dollar, the Aussie is headed for another test of support at $1.02. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $1.02 would confirm this, offering an initial target of $0.99.
* Target calculation: 1.02 – ( 1.05 – 1.02 ) = 0.99
Canada’s Loonie is in a primary up-trend against the Aussie dollar — as signaled by the 63-day Twiggs Momentum cross to above zero. Breakout above $0.982 completes a bullish ascending triangle formation with a target of parity.
* Target calculation: 0.98 + ( 0.98 – 0.96 ) = 1.00
The Aussie is also weakening against the South African Rand. Cross of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at R7.90 would confirm, offering an initial target of R7.50*.
* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50
We had an interesting discussion last week about the correlation between commodities and stocks. The weekly chart below shows how CRB Commodities Index closely tracks the S&P 500 — except in times of extreme volatility like 2007/2008. We are now witnessing another divergence, with the CRB headed for a test of primary support at 295 while the S&P 500 strengthens. Does weak demand for commodities indicate that stocks are over-priced as in 2007? The Fed has been doing its best to depress bond yields, pumping up stock prices ahead of the November election. It is too early to tell what the outcome will be, but we need to monitor this relationship through the year.
The divergence between Brent Crude and Nymex Light Crude, from early 2011, continues. Both are in a primary up-trend, however, and breakout above the 2011 Nymex high would threaten the still fragile US recovery, offering a long-term target of $140/barrel. Brent is currently testing medium-term support at $115, but respect of this would also confirm a primary up-trend.
Brent Crude is drifting lower but so far has not seriously tested medium-term support at $115/barrel. Respect would confirm the primary up-trend, offering a target of $135*. Respect of the zero line by 63-day Twiggs Momentum would also strengthen the signal.
* Target calculation: 125 + ( 125 – 115 ) = 135
The broader CRB Commodities Index is headed for a test of primary support at 295. Respect of zero (from below) by 63-Day Twiggs Momentum indicates continuation of the primary down-trend. Breach of primary support would confirm the signal.
* Target calculation: 295 – ( 325 – 295 ) = 265
Brent Crude is headed for a test of medium-term support at $115/barrel. Respect would confirm the strong primary up-trend; strengthened if 63-day Twiggs Momentum forms a trough above the zero line. Breakout above $126 would offer a target of $150/barrel*.
* Target calculation: 125 + ( 125 – 100 ) = 150
The broader CRB Commodities Index broke its long-term rising trendline and is headed for a test of primary support at 295 . Failure would signal a decline to 265*. The 63-day Twiggs Momentum peak below the zero line already indicates continuation of the primary down-trend.
* Target calculation: 295 – ( 325 – 295 ) = 265
