Sometimes you have to dive deeper to understand the short-term and long-term setups for a particular chart. This week's webinar went into a deep dive on the knife edge that is the US Dollar ($USD).
Why so focused on the US Dollar? It is so important for the macro direction over the year end. If we are about to substantially rotate into a new bull market, I think the direction of the $USD will be key. Which side of the knife edge it sits on in the upcoming weeks will be a major date with destiny based on my chart work.
If you like to invest in commodities, this will be an important week for you to examine the charts. I worked through an hour on my webinar that went by like minutes as I tried to explain the $USD /$CRB charts. We didn't get any time to review indexes or bonds which are equally exciting here.
Here is a direct link to the webinar if you can spare the time.
Commodities Countdown LIVE! with Greg Schnell - 2016-11-03 17:00 from StockCharts.com on Vimeo.
Webinar Skim // US Dollar 0:00 // $CRB 26:00 // $CRB Components 38:00 // Energy 47:00 // Gold 53:00 //
So I won't rehash the US Dollar in another chart parade here. I would encourage you to roll through the webinar and make your own conclusions.
On the back of that, I will cover off that Copper has broken out of a pennant, and is trying to move higher.
If the Commodity demand in Asia is starting to pick up, let's look to Asia and see what is happening.
Here is the Shanghai A-Shares Tracking ETF (PEK). While it has not broken out yet in $USD, it is starting to outperform the $SPX. We can see that the SCTR shows PEK to be one of the top performing SCTR's right now which it has not been for over a year. Perhaps this is the reason for Copper's breakout.
Hong Kong ($HSI)and Vietnam (VNM) disagree with the PEK chart but I'll leave it there.
The news that oil is dropping lower, not dripping lower is not news. The energy sector is getting renewed attention to the downside which is also covered in the webinar.
Stay tuned for the outcome of the US Dollar. I think it is the trade or the trigger to the best trade of the fourth quarter.
Greg Schnell, CMT, MFTA.