The BOJ monetary policy plays a large role in markets this year and, along with the Fed easy money, negates the April to August sell signal. The QE easy money is simply too powerful creating new all-time market highs and new asset bubbles week after week. There is global central banker intervention ongoing now whereas 2012 and prior was mainly a Fed-only show. Even the general commodities, such as Dr. Copper, has been weak for months but has no negative affect on markets. There is less demand for raw materials (since the global economy is weak and likely weakening) but equities make new highs due to the QE money-printing. Over the last week, the Rind now recovers back above the 13-week MA for a market buy signal. The behavior will be interesting over the next month to see if the CRB Rind turns down again, or not. For now, commodities as a market indicator is not working which goes against tried and true market trends that have held for years and decades. The central banker policies are nullifying the negative affects of lackluster commodity demand.
Here is a summary of recent signals. All work perfectly until April, coincidentally when the BOJ doubled-down on QE yelling Banzai! and destroying the yen as fast as possible to inflate the Nikkei, U.S. and European stock markets. Reference the CRB Trader site for excellent information on commodities.
8/5/13: Market Buy Signal; 522.50
4/3/13: Market Sell Signal; 538.62
11/26/12: Market Buy Signal; 514.92
10/15/12: Market Sell Signal; 516.37
8/6/12: Market Buy Signal; 508.48
3/26/12: Market Sell Signal; 540.37
1/9/12: Market Buy Signal; 527.46
This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
with a bullish signal on CRB I'm wondering how the downside on stocks will play...
ReplyDeleteKS, guess the stocks will correct in major 4 or CRB might have a strong influence on stocks?
V.
Nope, since the Rind did not create market weakness April-August, it simply shows the power of the QE easy money. We know that tapering begins September or within one or two months after, so that party is ending. Japan had a big spurt in the Nikkei as they destroy the yen trying to create inflation but they may long for the days of deflation if they have released a monster that they can no longer control (JGB's). So time will tell but the thought would be to simply not place a lot of emphasis on the commodity signals at all, on the bear or bull side, since the central bankers have distorted the markets too much. It would not be surprising to see the Rind roll back over as time moves along. The QE easy money appears to float around from sector to sector, continuing to pump new asset bubbles, the utes were pumped, then move on to real estate stocks, then retail, then financials, then divvy stocks, pumping and bloating them more and more and more, then the free money goes back to start again and last week started back into commodities, copper, coal, iron ore, steel, etc..
DeleteThank you KS!
DeleteV.