CRB Commodities Weekly Chart Forecasts QE3

Use the CRB to forecast the coming QE3.  As deflation sticks around, the CRB will weaken. QE2 occurred in the summer of 2010 as Chairman Bernanke watched the CRB print 250, causing him to panic and jump into the helicopter immediately (Bernanke is famous for commenting years ago about how he would drop money from helicopters to avoid deflation at all costs, hence the nickname Helicopter Ben). Price was ready to collapse in May and June but the bulls mounted a comeback.  The stronger dollar takes the CRB lower, a weaker dollar takes it higher.  The black dots on the bollinger bands show that once a BB boundary is violated, price will move back to either the center BB, or to the BB on the opposite side. Price violated the lower BB in May/June and note how the CRB now recoverd to the center BB. Thus, this would be a logical place for a move back down.

During the May/June bottom, price never made a lower low to verify positive divergence. Price recovered anyways.  The MACD line (red line and circle) shows a lower low that was never addressed; it wants to see price come back down for a look at sub 270 again. In a nutshell, QE3 occurs once the CRB falls under 270. If the CRB remains elevated above 270, Bernanke can keep holding off on his upcoming helicopter ride. Watch the blue box moving forward. 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.