GTX Goldman Sachs Commodity Index Weekly Chart; Sideways Symmetrical Triangles

Commodities are at a critical juncture. The US has been in a deflationary and disinflationary funk for many years as Keystone has described and discussed. Wall Street fought this thinking every step of the way but now the universal consensus is that low inflation and disinflationary behavior will remain in place for several years ahead. Thus, the radar goes up that the low inflation period may be ending.

Scrolling back to the 30-year bond chart and analysis posted the other day, yields have placed technical lows as per the charts ending the three-decade bond rally. This behavior also hints that inflation is on the come.

However, the sick central bankers have orchestrated the longest economic recovery in history due to their obscene Keynesian money-printing. It is sickening that the wealthy have raped the American system for all its worth since the Great Recession. Humorously, many of the billionaires and millionaires are becoming worried about America's new Gilded Age and opining that more must be done for the common person.

The wealthy class, that destroyed the middle class over the last five decades by shipping jobs overseas, are all of a sudden concerned over the success of the little people and the United States as a whole. Pause for laughter. The politicians, corporate executives, government officials and the elite privileged class sent jobs overseas to lower expenses for companies which increases earnings and sends stock prices through the roof. Of course, the wealthy are the ones that own the large stock portfolios so they stuff big wads of cash into their pockets as they adjust laws and regulations to allow more raping of the American system. One-half of America does not own a single share of stock; stop and think about that.

So the US is left with a near 11-year rally in the stock market created by Federal Reserve and other global central banker easy money wondering how the grand financial experiment ends. Note the big rallies from the early 2016 bottom and early this year's bottom both 100% orchestrated by the Federal Reserve and other global central bankers. Commodity prices stumble sideways into the symmetrical triangles above and must make an important up or down decision.

The price decision from the triangle patterns has serious ramifications on all our futures. If prices fail from here, we are headed for more deflation. Even though the Treasury yield charts, and the universal belief that low inflation will remain, hint that inflation will actually begin slowly ramping higher going forward, an economic recession is the wild card (that may cause disinflation and low inflation to linger).

If commodity prices tank, obviously it will be due to the fact that global demand is in a bigtime confirmed downtrend. In other words, "We don't need no steenkin' oil, copper, iron ore or grains." Raw materials will not be in demand since products will not be in demand. This is the pathway to doom and gloom and a couple years of fear, despair, and agony, as Grandpa Jones would sing.

If commodity prices jump up and out of the sideways triangles, it is party time for the bulls and inflation is truly on the come in the weeks and months ahead, finally, after the Federal Reserve has tried to create inflation for 11 years with their sick (because the central bankers only enrich the wealthy, creating a huge rich versus poor income gap, that is about to morph into a multi-year probably violent class war in the US after the recession hits) monetary policies.

So those are the two paths ahead. Robert Frost opined about the road not taken, but which one is that, is it the one less traveled? Flip a coin for the road ahead since the chart indicators and moving averages are all moving dead flat sideways like price. Price, the 20-week MA and the 50-week MA are all at 2424-2485. It is decision time. Price must bounce or die.

The purple triangle has a side that is 700 points so a breakdown from 2430 will target 1730 and trouble and misery ahead. A breakout above 2430, which price is trying to do now, will target 3130 and market joy ahead. The blue triangle vertical side is about 1300 points so a breakdown from 2350 would target 1050, mayhem for the stock market and millennial's asking why they were not told that life could become so drastically different and hard so fast (recession). A breakout above the top blue triangle line at 2600-ish would target 3900 and record highs in stock markets that continue through 2020. Folks will conclude that central banks can print money forever creating never-ending stock market gains.

The chart does not hint at which way price wants to go (although price is trying to sneak up and out of the purple triangle right now) but realize that if the red arrow failure occurs, the Armageddon scenario plays out for the US economy and markets. Global deflation and disinflation and recession will be on the table for at least a couple years and the stock market will be trending steadily lower and lower.

On the flip side, if the happy green arrow breakout higher occurs, the joyous scenario unfolds where global growth picks up because it is true growth and not the same-o 11 -years of central bank-induced growth (that lasts for a couple or three quarters and then fizzles out requiring more central banker money to create another spurt). Stocks will be printing new record highs through 2020, recession will be off the table, jobs will be plentiful and inflation will be on the rise but it will be good inflation reflective of a healthy economy and markets. Don't hold your breath for this outcome. The former scenario is more likely.

If the breakdown of commodities occurs, the low inflation will linger for another year or two and then recover every year forward after that then likely flying into hyperinflation perhaps about 3 or 4 years out which is going to be a whole new set of problems. The United States faces a wild two decades ahead. Crony capitalism is on its way out and the multi-year class war that is upon us will likely lead to a socialism-light type America in a couple decades or perhaps a compassionate capitalism if you will.  At least that new evolving system over the next 5 to 20 years, whatever it is, will attempt to not screw the common people. Capitalism is destroyed by the (greedy) wealthy elite class that benefit the most from the system.

The greedy wealthy probably destroyed any hope that  a capitalism system could exist in the very long-term. Capitalism failed because of the same reasons that all other ism's (socialism, communism, fascism, dictatorships, etc...) fail; human greed and non-transparency. It's not rocket science. Watch commodities closely since by January you will likely know the path ahead that has been chosen for the United States, and yourself. 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.