Looking back, commodities had a high conviction in february based on a longterm trend. Combining macd and BB break out. Markets have either risk-on sentiment or defensive. During risk-on phase people want to put money to work, there is too much money. During risk-off or defensive, people want money and safety. Assets become too expensive. Bitcoin rallies...
The chart of $DJP, the Dow Jones Commodity ETF, if forming a descending triangle, which typically is a bearish manifestation on the charts, particularly when it occurs as a continuation pattern. I will take a short position here if a BO occurs.
DJP, a commodities play, is an inflation hedge. If DJP breaks 37 voiding the Trendline or GANN FAN line support, then inflation may have peaked out temporarily. Holding 37, DJP may see higher inflation numbers.\ Note that all impt FIBO levels are respected here in increments of 4. 37 is the 2.618 level of 31 to 27. If 37 holds, the next resistance is at 41, the...
DJP is far far worse than 2009, and is now at decade low. Other than diverged RSI and MACD, the main trend is still down.
Similar triangle bottom pattern as 2009, with similar RSI and MACD settings. Buy triangle breakout + RSI breakout, on weekly close basis. Or if aggressive, buy now with a reasonable stop (like March low).
A tiny breakout and above 10 MA. May be still bottoming and forming a small right shoulder (or cup handle). But I think in near term, it should be able to reach 0.382 Fib ($32 level).
Still a little early to call, but the divergence is evident. To confirm, we want a positive MACD, and all red resistances get cleared.
Dollar faces double resistance with lost momentum. Meanwhile assets inversely correlated with dollar seem to be doing better. If dollar is weakening in the next several months, these assets may be favorable. Conversely if dollar breaks out and continue to strengthen, these assets will be pressured even more. I will watch the red support lines closely.
Energy (VDE), material (VAW), commodities (DJP), inflation protection (TIP), gold (GLD) and bond (TLT). I am not certain why (probably because of weaker dollar, as shown on the chart), given this, current dollar and rate on their monthly charts are indeed very weak so can these assets perform well during first half of next bear market? Only time can tell. Good Luck!