The Six Year Commodity Futures Cycle
Although both the 1986 and 1992 bottoms
occurred almost in the middle of the July Quarter
the accelerated market advance began several months later after the basing period. 1999 inverted with the first bottom in February and the final bottom in July. As we move into the 21st Century we will likely see this cycle and many others change as larger percentage of the various commodities are produced by emerging Nations.
The six year cycle outlined has been altered in recent years by changing the weighting of the Index, both in components and their relative percentage participation to the aggregate price. The current weighting is more indicative of the general commodity list than it's predecessor which was heavily weighted in grain.
Not all markets will bottom simultaneously, just as not all markets bottom at the same time in the stock market. That means we focus on the markets with similar Historic Worksheets to the CRB. They will be the new bull markets.
The CRB Historic Worksheets and Historic Trendline Studies are examples of how we determine direction on all markets. Worksheets on individual markets found under Historic Worksheets are more detailed and contain favorite months and Trendline Studies.
It is my hypothesis that these long term trendlines are actually support and resistance levels with the long term inflation rate and basic supply and demand factored in. That would account for the gentle up slope, and accuracy over many years.
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This is not a solicitation of any order to buy or sell, nor does it provide any recommendations in regard to the market. Information contained herein is obtained from sources believed to be reliable, but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures trading involves significant risk and is not suitable for all investors.