For more than 50 years, the world-renowned CRB Index has served as the most widely recognized measure of global commodities markets. This leading commodity futures benchmark is designed to provide timely and accurate representation of a long-only, broadly diversified investment in commodities. This is far from the end all be all but based on the overall direction of the CRB index commodity traders can get a very good idea of the sentiment in commodities.
The white line I've drawn in the middle of the chart has served as support and resistance now dating back five years so on an appreciation of 4% from current level prices would be back above that pivot point. Prices appear to be establishing a base and I am in the camp that moving forward we will experience upside in not all commodities but this index as a whole.
The index is comprised of 19 commodities: aluminum, cocoa, coffee, copper, corn, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, orange juice, RBOB gasoline, silver, soybeans, sugar and wheat. Currently the breakdowns are as follows: 39% energy, 41% agriculture, 7% precious metals, and 13% base/industrial metals.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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