CRB Commodities and SPX Weekly Charts Cup and Handle Bull Flag QE Pumps the Markets but Commodities Stalling

If anyone said one month ago that the dollar would catapult higher, copper lower, commodities lower, oil dropping, and that equities markets would be up, that would be unbelievable, however, that is exactly what happened. China and Japan data are weak over the weekend but the equity markets simply do not care. The need for commodities and copper drop on the weaker global economic environment, which says that global business should slow, but traders cannot get enough of equities, dividend stocks, blue chip Dow stocks, REIT's, high-yield corporate's, all moving bubbly higher.  The SPX chart clearly shows that the equity markets have solely moved higher over the last five years purely on Fed stimulus, and now ECB, China and Japan stimulus as well.

The CRB chart shows the C&H pattern from 2009-2010 that targeted the 380-ish that was achieved in early 2011. In addition, there is a two-leg bull flag in 2009-2010, the first leg is QE1, then the sideways consolidation occurs to form the bull flag, then the second leg is QE2. Overall, a five-year sideways symmetrical triangle is now in place with price and the moving averages funneling into decision time. Bulls win above 305, bears win below 285. The moving averages are all at 296-297, testimony to the sideways action, thus, the bears are at an advantage under this level. Watch CRB 296-297 as a bull-bear line in the sand that tells you who is winning and the 305 and 285 will confirm the winner moving forward.

Keystone's Inflation-Deflation Indicator is CRB/10-year price = 294.38/99.656 = 2.95 which is signaling disinflation (between 2.9 and 3.0). It is amazing that the equity markets do not sell off with weaker copper and commodities but a new week is ahead. The SPX chart verifies that the Fed's QE programs clearly create all the equity moves higher. The CRB chart shows the commodities petering out for two years with the Fed stimulus only creating small pumps in the CRB price, and the current QE4 Infinity adn Beyond actually results in the CRB below where it was at in the Fall. This is not healthy but no one cares. Traders are simply taking the Fed's easy money and creating new bubbles in the broad markets, Dow, SPX, dividend stocks, REIT's and high-yield instruments. 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.