Friday, July 11, 2014
the Sweet spot
Earlier in the week (see Here), we had mentioned that the broader commodity space was following in the month old footprints of the precious metals sector, as the CRB (relative to equities) was testing the cycle lows from earlier in the year.
To a large degree, the commodity sector is jockeyed through major pivots by trends in the US dollar.
Since turning bearish on the US dollar index last June, we have followed a historic momentum comparative of the index – that continues to point towards lower lows in the dollar. All things considered, the CRB should break higher towards its previous cycle peak – as the US dollar index plumbs the bottom of its long-term range.