The best indicator of whether global central banks are giving the markets the easy money they crave is a simple chart that I’ll share with you today. And this important number (that I think all investors should follow) is coming to a critical point.
Today I’ll share with you what happens if that easy money is hard to come by, or whether the market gets what it wants. Watch my video to see for yourself …
Yours for trading profits,
P.S. Whether or not the Fed takes action on monetary policy, it’s always time for you to take action with your own money. As a member of my Red-Hot Global Resources service, you can be among the first to see how I’m gearing up for longer-term returns from the short-term moves the central bankers and other market forces create. Sign up for your risk-free trial membership today!
Hi, this is Sean Brodrick for Uncommon Wisdom Daily.
This week, everyone is watching the central banks, hoping for more easy money to give a boost to the global economy and the markets. But if you really want to see if the central banks are giving the markets what they crave, I think there’s one commodity chart that is a better indicator than any other.
It’s not a chart of oil … or gold … or copper. It’s a weekly chart of the Reuters/Jefferies CRB Index. This index tracks a basket of 19 commodities, including aluminum, coffee, copper, corn, crude oil, gold, soybeans and more. Petroleum-based products make up a third of the index, so it gives a good snapshot of the commodities important to the global economy.
So far this year, the picture has been pretty bleak, and now it’s coming to a critical point. As you can see, the CRB Index is in a fairly well-defined down channel. And since breaking support — the dotted line on the chart — it has plunged.
Now, the CRB Index is oversold and at the bottom of the channel. So I think it should rally to the upper end of the channel, or at least to the dotted line, over the coming weeks.
However, should the central banks fail to provide enough easy money, we could see the CRB plunge down out of that channel. That would be a very bleak development for the global economy, and would probably be a harbinger of more bad news to come.
I’m watching the central banks like everyone else, and will be firing off recommendations based on what they do, or don’t do in the days and weeks ahead.
I’m Sean Brodrick for Uncommon Wisdom Daily. Thanks for watching.