Commodity Review (10-Year Charts)

Have been reviewing long-term charts of several commodity issues/groups that I track.

Below are several charts which suggest that, IF T-yields break out here, we will see runaway inflation in everyday consumer goods (energy, food, etc).

Without drawing too many conclusions, I'll let charts speak for themselves. Working thesis: Runaway Inflation ... is Bullish !


Starting with $CRB:

http://stockcharts.com/c-sc/sc?s=$CRB&p=W&yr=10&mn=0&dy=0&i=p35110269582&a=288052318&r=1357414967929.png


The key question: have yields bottomed, or is this just a correction ?

$TNX:

http://stockcharts.com/c-sc/sc?s=$TNX&p=M&yr=20&mn=0&dy=0&i=p90780515460&a=288050781&r=1357415055598.png

$TYX:

http://stockcharts.com/c-sc/sc?s=$TYX&p=W&yr=20&mn=0&dy=0&i=p34593377284&a=221988132&r=1357415176768.png

TLT:

http://stockcharts.c...57415260231.png

... and their implications for $gold:

http://stockcharts.com/c-sc/sc?s=$TNX:GLD&p=M&yr=9&mn=0&dy=0&i=p69674962310&a=288051393&r=1357415307608.png

Black Gold & Silver:

http://stockcharts.com/c-sc/sc?s=$WTIC&p=W&yr=7&mn=0&dy=0&i=p37885004064&a=288053288&r=1357415550131.png

http://stockcharts.c...57415578481.png

http://stockcharts.com/c-sc/sc?s=$SILVER&p=W&yr=20&mn=0&dy=0&i=p85453964930&a=219806301&r=1357415614209.png

My favorite #1 Bull:

http://stockcharts.c...57415722303.png

My favorite #2 Bull:

http://stockcharts.c...57415829602.png

Edited by beta, 05 January 2013 - 02:57 PM.

Water is also a commodity .. but maybe no longer free, in the future:


http://stockcharts.c...57415891846.png

Edited by beta, 05 January 2013 - 02:59 PM.

QQQ: Tech or Commodity ? 57-59 support level is key on the next correction.

http://stockcharts.c...57416065008.png


AAPLES ... isnt that a commodity too?

http://stockcharts.c...57416186731.png

Soybeans:



http://stockcharts.c...57416421824.png

Beta: Thanks for the great charts! stubaby

Thanks Stu, I'm learning alot from watching you and other chart pros.

I found this excellent site that provides a comprehensive series of real-time Macro-Economic charts:

Here's one comparing prior cycle peaks in oil, gold & USD; note the similarity to early 1981:
http://www.macrotren...istorical-chart

Another look at the 1981 comparison here -- note how $silver significantly underperfomed on this cycle:
http://www.macrotren...istorical-chart

This one compares $gold cycle to other asset bubbles:
http://www.macrotren...-bubbles-repeat

Gold v. CPI:
http://www.macrotren...istorical-chart

Gold: Crude oil 60-year ratio:
http://www.macrotren...istorical-chart

This is an awesome resource site for economic historical trends -- thanks to a poster on Daneric's blog for flagging this.

Edited by beta, 06 January 2013 - 12:07 AM.

Gonza Lira posted this essay back in late 2010 discussing the consequences of a Treasury sell-off, that seems quite prescient: Was Stagflation in 79 Really Hyperinflation?. He wrote: "the first hint of commodity prices rising as the Treasury markets begin to fade will be an indication that hyperinflation is on its way. And by the time we get to our March 1980 moment—by the time we get to 15% annualized inflation index—it will be over."

Commodity producers appear to be the big winners, in a stag/inflationary environment. By comparison, consumer retailers/distributors lose both aggregate demand and pricing power. Equities and real estate stay flat.

This would make sense in TA terms, as commodity waves tend to accelerate and peak in Wave 5 while other equities peak earlier in Wave 3. Note how QQQ outperformed CRB off the the 2009 lows thus far.

In the coming next (final) runup that begins from the spring lows, I believe that SPX and COMPQ will see shorter Wave 5s that are only 10-20% above their recent peaks (i.e., QQQ 80). By comparison, leading commodity producers may double from their coming next lows, in a true parabolic blow-off--PMs included.

In the short-term, I am looking for a 10-15% correction in the commodity sector for buying opportunities, particularly in high-quality agriculture names.

Edited by beta, 06 January 2013 - 03:28 PM.

what are high quality ag names? you mean equities right??