CRB Rind Index Weekly Chart

The Raw Industrials Index, also known as the Rind Index is a less-followed, but very important index.  The Rind is a key barometer of global economic health and also of oil prices moving forward. The Rind Index will typically lead the CRB Commodities Index by about 10 weeks. The index is important because it is hard to manipulate, many of the items making up the index are every day manufacturing needs. The make-up of the Raw Industrials Index includes hides, tallow, cocoa, copper scrap, lead scrap, steel scrap, zinc, tin, burlap, cotton, print cloth, wool tops, rosin and rubber.  In other words, key raw materials that are very telling for overall global economic health. If these products are in great use the economy is moving along with high fives all around.  If these products decrease in use and there is less need for raw components, then obviously factories are slowing down and demand for products is low, a negative and bearish market and economic signal.

Keystone adds the Rind Index to the Other Market Signals page on this site. A weekly chart is useful with a 13-week MA cross as a signal line. The chart shows a market buy signal on 1/9/12 then a sell signal on 3/26/12, then a buy signal on 8/6/12 (as the Draghi OMT and Bernanke QE3 Infinity money printing pumps markets), then a sell signal on 10/15/12 and then the current buy signal on 11/26/12 that remains in place. Thus, the Rind told you at Thanksgiving that the bulls would be rockin' into the new year. The chart is a few days behind so the price line likely has a hook to the downside to reflect the last day or two. Since the current signal is bullish the wine is flowing like water for the long traders, however, note the sideways blue channel in play.  Even though the Rind is moving higher to lead the market bulls, the Rind is below the 2012 numbers. Contrast this with the SPX well above 2012 highs. If the economy was very strong to reflect such a robust stock market one would expect the Rind to be much higher.

Thus, watch for the sell signal ahead (price moving under the 13 MA) and if the top rail resistance of the blue channel holds, or not. 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.