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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© 1998-2012 Charting Your Futures Brokerage Company
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by CYF Brokerage. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.